Ties between India and the United States hit another bump last week with the Trump administration freezing green card requests from eight technology firms, including those from India.
U.S. Labor Secretary Keith Sonderling announced on October 8 that Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, Capgemini, Microsoft, and Adobe have been suspended from participating in the Permanent Labor Certification (PERM), a program that is largely used by technology companies and outsourcing firms to sponsor a foreign worker’s permanent residency in the U.S. “We will not accept any new or process any pending permanent labor certification applications involving these companies,” Sonderling said.
The announcement came weeks before U.S. Secretary of State Marco Rubio’s visit to New Delhi.
Indian IT companies appear largely unperturbed by the U.S. policy change. Infosys, India’s second-largest IT firm, said it did not anticipate a material impact from the PERM application suspension. The National Association of Software and Service Companies (NASSCOM), India’s IT industry body, said that Indian companies had significantly reduced their dependence on H-1B visas in recent years and had expanded their local hiring in the U.S. Relatively few workers move from H-1B visas to permanent residency through PERM, it said.
Ajay Srivastava, who heads the Global Trade Research Initiative, a New Delhi-based trade and commerce think tank, said the U.S. move was a “warning for India’s IT industry.” “It covers four leading Indian IT firms and disrupts the permanent-residency plans of their employees, making long-term staffing in the U.S. more uncertain,” Srivastava told The Diplomat.
“The larger concern is India’s dependence on a market that accounts for 54.1 percent of its software and IT-enabled services exports. The measure signals a more protectionist U.S. approach to foreign technology workers. India should prepare for possible restrictions extending beyond green card sponsorship,” he said, adding that Indian firms should widen their export markets to reduce their vulnerability to sudden U.S. policy changes.
India’s software services exports to the U.S. fetched $221.4 billion in revenues in 2025-26, an 8.2 percent year-on-year increase.
Adding salt to injury was a comment by Vice President J.D. Vance. Speaking to reporters after Sonderling’s announcement, Vance said: “Our message to Microsoft is you’re a great American company, but you’ve got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants.”
In a sharply worded statement, India’s Ministry of External Affairs said that “talent mobility adds value to both economies.” The measures announced by the United States “do not advance the shared ambitions of both countries.” Recalling that the U.S. was a country built by immigrants, the statement said that “resorting to terminology that carries painful historical and colonial legacy connotations is deeply offensive.” The allusion was to India’s British colonial rulers transporting more than a million Indians to work as contract labor in British colonies abroad after the abolition of slavery by the British in 1833.
There is speculation in India that the U.S. policy change on green card requests is aimed at showing President Donald Trump’s domestic audience that his administration is tough on immigration. The U.S. will vote in mid-term elections in November. Voters are reportedly unhappy with the Trump administration’s performance, especially on the handling of the economy, with job numbers falling short of expectations.
Last week’s restrictions on Indian IT companies, together with Vance’s comments, have added to the chill in India-U.S. relations, especially since Trump returned to the White House in January 2025.
A trade pact negotiated between the two sides remains unsigned despite many rounds of talks. Washington’s courting of Pakistan, which India sees as instigating terrorism against it, has not gone down well in Delhi.
Speaking at the Asia Society in New York in September, India’s Minister for External Affairs S. Jaishankar highlighted the U.S. anti-immigration push affecting the movement of Indian workers to the U.S. as among the main causes for the current strain in bilateral ties.
Since returning to the White House last year, Trump has implemented several measures to rework American immigration policy. These include bestowing more powers on officials to enforce domestic immigration laws as well as increasing anti-immigration raids and deportations. Last year, India accepted the return of almost 400 of its nationals deported by the Trump administration. Their arrival in India in military aircraft and in shackles caused a domestic outcry.
The Trump administration has also been squeezing the H-1B visa program that allows foreign nationals to temporarily work in the U.S. in specialty occupations for a maximum of six years. In August, Washington proposed a regulation to raise the fee on new H-1B visas to over $100,000. The H-1B program offers 65,000 visas annually, allowing American employers to hire highly skilled workers with specialty training. The program permits another 20,000 visas for workers with advanced degrees for a three-to-six-year period. Fees for the two categories of visas were between $2,000 and $5,000 earlier.
Trump’s proposed regulation was struck down by a California court in September, blocking the $100,000 fee tag. India has been the largest beneficiary of the H-1B visas program for many years.
With the U.S. narrowing the options for skilled Indian workers, the Indian government could look at asking American companies to follow the examples of Microsoft and Adobe and set up Global Capability Centers in India. These centers are offshore units set up by companies to deliver services for their parent organizations.
India presently has more than 2,100 centers employing 2.36 million people and generating nearly $100 billion in revenue. The Indian government is also looking to attract Indian workers currently employed in the U.S. to return home.
The denial of green cards under PERM is likely to figure in talks when Rubio, the U.S. secretary of state and national security adviser, arrives in India later this month. Also likely to figure in the agenda is the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” which authorizes Trump to sanction countries that buy oil from Russia and Iran. India is among the largest purchasers of Russian oil. Given that the U.S. itself is looking to import diesel from Russia, India is likely to seek clarification on the provisions of the Lindsay Graham Act should it import fuel from Russia.
People-to-people relations have always been the strongest anchor of India-U.S. bilateral ties. Washington’s latest move hits this anchor. Rubio and Jaishankar have a challenging agenda before them.
