What the US PERM Freeze Really Costs India’s IT Industry

The Department of Labor suspended PERM labor-certification services for eight named technology companies. The action applies to new applications and applications already pending. It does not describe a general halt for every employer or every immigration category. It specifically targets PERM requests involving Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, and Capgemini.

PERM is normally the first step toward an employment-based green card for most EB-2 and EB-3 applicants. Employers must show they tried to hire American workers for the relevant jobs. By stopping processing, the department interrupts that employer-sponsored route before the case can move forward.

The immediate effect is delay for affected applications and workers. The article links the action to a rule allowing temporary service interruptions when there are grounds to suspect fraud or willful misrepresentation. It also stresses that allegations are not proof of fraudulent activity. The suspension could therefore increase uncertainty without establishing wrongdoing.

PERM stands for Program Electronic Review Management. It is the initial step in the employment-based green-card process for most immigrants using the EB-2 and EB-3 categories. Its purpose is to test whether an employer has genuinely tried to hire American workers for the job before sponsoring an immigrant worker.

In the H-1B-to-green-card path, workers first enter the United States, then live there while working under temporary authorization. PERM belongs to the third broad stage: moving from temporary residence toward permanent residency. A successful PERM process allows the application to proceed to later immigration steps, although it does not itself grant a green card.

This position makes a suspension significant. It interrupts a required transition point for affected workers. However, delayed PERM processing does not automatically end a person’s job or H-1B status. Workers may continue working lawfully while their existing authorization remains valid, even as their permanent-residency plans wait.

The broader employment-based green-card backlog included approximately 1.8 million people in 2023, according to the Cato Institute estimate cited in the article. About 1.1 million of them were Indians. That means Indians represented around 68 percent of the queue, making them the largest affected national group described in the article.

The scale is especially striking because the backlog is not simply a short administrative delay. The estimate put the time needed to clear the queue for Indian applicants at up to 134 years. It also projected that approximately 424,000 Indians could die before obtaining a visa. These figures describe the wider queue, beyond the eight companies facing the PERM suspension.

The suspension adds another obstacle to an already expensive and unpredictable system. It can delay permanent residency for individual workers, even when they remain legally employed. The article presents the backlog as a major reason immigration uncertainty affects personal decisions, family planning, and long-term employment choices.

When PERM processing is delayed, the worker’s transition from temporary immigration status toward permanent residency is interrupted. The person may remain employed lawfully if their existing H-1B or other work authorization is still valid. The article therefore distinguishes between an immediate job impact and a delayed long-term immigration outcome.

For example, an Indian IT professional sponsored through an employer could keep working while the PERM case waits. But the case cannot advance normally through the green-card process during the interruption. The worker remains dependent on the validity and conditions of temporary authorization, rather than reaching the more secure permanent-residency stage.

That uncertainty can affect decisions and planning severely. Permanent residency is important in a worker’s life, and another obstacle can disrupt employment choices and personal plans. The broader backlog makes the delay more serious. Indian applicants already faced a possible wait of up to 134 years, according to the cited estimate.

The Department of Labor invoked 20 CFR § 656.31(b). That rule allows temporary interruption of services when there are grounds to believe fraud or willful misrepresentation may be involved. The department used that authority to stop accepting and processing PERM applications connected with the eight named technology firms.

The stated rationale is suspicion, not a completed finding. Vice President J.D. Vance also accused companies using H-1B workers of creating a caste of foreign indentured servants. Those comments formed part of a broader immigration controversy, alongside reported investigations into the J-1 visa program involving universities.

The article draws a firm distinction between allegations and proof. It does not state that fraudulent activity by the companies has been proven. Therefore, the suspension signals heightened scrutiny and interrupts applications, but it should not be presented as a final determination that the named firms committed fraud or misrepresentation.

Indian technology companies do not need to send every employee to the United States to serve American clients. A U.S. customer can buy software development, consulting, maintenance, and other technology services from a team based in India. This model reduces reliance on immigration pathways for each worker.

The article contrasts that approach with the traditional practice of sending many Indian professionals to work overseas at client facilities. RBI data showed on-site revenue falling from $19 billion to $18.4 billion. The decline suggests companies are placing greater emphasis on other delivery models, including work performed from India rather than at U.S. locations.

The sector remains large enough to support this shift. Nasscom reported $315 billion in Indian IT revenue in FY2025-26, including $246 billion in exports. The industry employed about 5.95 million people and added roughly 135,000 net jobs. Immigration restrictions may accelerate this delivery rebalancing while imposing costs on workers seeking residency.

The system separates temporary work authorization from permanent residency because they represent different stages and restrictions. H-1B status allows a worker to be employed temporarily under immigration rules and the conditions of the employer’s petition. Permanent residency is the later transition from temporary residence to a more lasting immigration status.

The article describes three broad stages: entering the United States, living there as a worker, and eventually receiving permanent residency. PERM belongs to the third stage. Before moving forward, the employer must show it tried to hire Americans for the position. This requirement makes the green-card process distinct from simply obtaining permission to work temporarily.

The practical difference is crucial during delays. An H-1B worker may continue working lawfully while a green-card application is delayed, provided existing authorization remains valid. But the worker’s long-term residency, planning, and security remain unresolved. The PERM suspension therefore interrupts permanence without necessarily ending current employment.