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EYE ON INDIA OCTOBER 16, 2026 | The Indian Eye 10

Trump’s H-1B crackdown:

Has the US put Indian IT

industry on notice?

The suspension of major technology companies from permanent labour

certification programmes signals a tougher US immigration environment

OUR BUREAU the Trump administration is increas-
ingly presenting immigration as a test
New Delhi
of corporate loyalty to the domestic
S President Donald Trump’s workforce. That approach may satisfy
latest immigration crackdown parts of the president’s political base,
Uhas put India’s technology but it risks increasing the costs and
industry under renewed pressure, uncertainty faced by businesses op-
with major Indian IT companies erating in a highly competitive global
among those suspended from filing industry.
new applications under the Perma- The pressure extends beyond
nent Labour Certification (PERM) established IT workers. The Depart-
programme. The move, which also ment of Homeland Security has pro-
affects American technology giants posed fees of $70,000 for initial Op-
Microsoft and Adobe, signals a more tional Practical Training applications
restrictive approach to foreign talent by foreign students and $30,000 for
even as US businesses continue to de- subsequent applications. The propos-
pend on globally sourced skills. Nasscom says Indian technology companies had significantly reduced their dependence on al, which was open for public com-
The US Department of Labour ment, could reshape the economics
announced that companies including H-1B visas while expanding local hiring in the US (Agency file photo) of employing international graduates
Infosys, Tata Consultancy Services, if implemented as described. It also
Wipro, HCL and Cognizant would recruited internationally, and teams noted that the number of employees signals that the administration’s scru-
be barred from submitting new appli- working from delivery centres in India transitioning from H-1B status to tiny reaches beyond H-1B workers to
cations or having pending permanent and other countries. Any restrictions permanent residency through PERM other routes through which foreign
labour certification applications pro- on moving talent or securing per- was relatively limited. students enter the US labour market.
cessed. The department cited multi- manent residency can raise admin- The administration’s argument is For India, the stakes go beyond
ple active federal investigations. US istrative costs, complicate workforce that companies must not use foreign the balance sheets of individual com-
officials have framed the action as planning and make it harder to retain labour to undercut American work- panies. Information technology ser-
part of a wider effort to prevent visa experienced employees. ers. Vice-President JD Vance accused vices have been a major link between
fraud and protect American workers. The industry, however, has technology companies of benefiting the two economies, supporting ex-
The distinction between the changed considerably from the peri- from foreign-worker programmes ports, investment and employment
H-1B visa programme and PERM is od when Indian software companies while laying off US employees. He while connecting Indian professionals
important. H-1B visas allow US em- relied more heavily on sending large cited Microsoft’s reported layoffs and with American businesses. A more
ployers to hire foreign professionals in numbers of employees to US client visa approvals as evidence of what the restrictive US immigration regime
specialised occupations, while PERM sites. Over the years, firms have ex- administration considers an imbal- could encourage companies to accel-
is a labour certification process gen- panded local recruitment and built ance. Microsoft disputed the broad- erate automation, expand local hiring
erally used by employers seeking em- substantial workforces in the United er implication, saying most of its US or move more work offshore. Each re-
ployment-based permanent residence States, while moving more software workforce comprises Americans and sponse would carry different costs for
for foreign workers. The suspension development and support work to off- that 80 per cent of its approximate- US employers and Indian workers.
therefore does not amount to a blanket shore and distributed delivery models. ly 6,000 H-1B filings in the last fiscal The suspension also comes at a
cancellation of H-1B visas, but it could Nasscom, India’s leading tech- year involved extensions or changes in sensitive moment for India-US eco-
complicate the longer-term immigra- nology industry association, sought to status for existing employees, rather nomic relations, when technology,
tion prospects of affected employees. underline this distinction, arguing that than new hires. trade and talent mobility are closely
For Indian IT companies, the immigration and skilled talent mobil- The episode illustrates the polit- intertwined. Although the action is
immediate challenge is navigating a ity should not be treated as the same ical tension at the heart of the tech- tied to investigations and a specific
more uncertain regulatory environ- issue. It said Indian technology com- nology debate. American companies certification programme, repeated re-
ment. Their US operations depend panies had significantly reduced their want access to specialised skills, par- strictions could deepen uncertainty for
on a combination of employees hired dependence on H-1B visas while ex- ticularly in areas such as cloud com- Indian companies seeking to plan long-
locally, professionals transferred or panding local hiring in the US. It also puting and artificial intelligence, but term investment and staffing in the US.

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