US Bars 8 Firms from PERM: India Responds
Why in News?
- On 8 October 2026, US Labor Secretary Keith Sonderling announced that the Labor Department will stop accepting or processing Permanent Labor Certification (PERM) applications from eight companies.
- The companies are Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL and Capgemini. The Department cited multiple active federal investigations.
- India's Ministry of External Affairs responded on 9 October. Spokesperson Randhir Jaiswal said the step does not by itself affect the validity of H-1B visas, but that there could be some impact on the green card process.
- He called Vice President JD Vance's descriptions of Indian professionals "unwarranted" and said the US steps "do not advance the shared ambitions of both countries".
Key Terminologies
- Permanent Labor Certification (PERM)
- The US Labor Department process that employers generally must complete before filing most employment-based green-card petitions. It certifies that hiring a foreign worker will not displace qualified US workers.
- H-1B visa
- A temporary US work visa for skilled workers. The MEA stressed that PERM is distinct from the H-1B programme.
- Green card
- The common name for US permanent residence. For many skilled workers the route to it starts with employer sponsorship through PERM.
- Optional Practical Training (OPT)
- Work permission that lets F-1 international students work in the US after study. The Department of Homeland Security proposed new fees for it on 7 October 2026.
Key Issues
- Pathway versus Visa: PERM is the first step to a green card, while H-1B is a temporary visa. The MEA said on 9 October that the suspension does not by itself affect H-1B validity, so current workers keep their visa status.
- Scale of Dependence: Sonderling said the eight companies requested almost 3 million foreign workers since 2009, with over 230,000 H-1B approvals and over 100,000 PERM certifications. Such totals explain why the Department chose them.
- Allegations of Misuse: Vice President Vance said the H-1B programme is rife with fraud and that Microsoft laid off 6,000 American workers in 2025 while receiving H-1B approvals. These are claims made by the US side, and the companies face active investigations.
- Uneven Exposure: TCS said its PERM applications were in single digits in the last two years and that it plans to hire an additional 15,000 people in the US over five years. Exposure therefore differs sharply by company.
- Personal Cost: Zoho founder Sridhar Vembu said Indians on US visas face "the painful prospect of uprooting the life you have built", which points to the human effect on employees awaiting green cards.
Key Implications
Positive/Pros/Merits
- Visa Status Protected: The MEA said the PERM suspension does not by itself affect H-1B validity, so existing H-1B visas stay valid.
- Firm Resilience: TCS said it does not expect the suspension to affect its workforce strategy or customer engagements, and that it has 31 offices and delivery centres across the US.
- Industry Position: Nasscom said immigration and skilled talent mobility are distinct issues and that Indian tech firms have reduced H-1B dependence and expanded local US hiring.
- Domestic Opportunity: Vembu urged Indian professionals to return, which, if adopted, would add skilled workers to India's own technology sector.
Negative/Cons/Demerits
- Green Card Delay: Jaiswal said there could be some impact on the permanent residency process of eligible employees of the affected companies, since PERM is generally the first step.
- Diplomatic Friction: The MEA called the terminology used for foreign workers "deeply offensive" for its colonial-era connotations, and said the US steps do not advance shared ambitions.
- Wider Squeeze: The announcement came a day after the Department of Homeland Security proposed new fees for F-1 students seeking OPT, which adds pressure on the student-to-worker route.
- Investigations Continue: The Labor Department attributed the suspension to multiple active federal investigations, so the duration and scope of the freeze are not defined.
Key Initiatives
- Ministry of External Affairs: On 9 October 2026 the MEA said India would keep monitoring developments, clarified that H-1B validity is unaffected, and rejected the characterisation of Indian professionals as unwarranted.
- Nasscom: The industry body said that firms will continue to adhere to applicable US regulations and that Indian tech firms have reduced H-1B dependence and expanded local US hiring.
- United States Labor Department: Sonderling announced on 8 October 2026 that it will not accept new PERM applications or process pending ones from the eight named companies.
- United States Department of Homeland Security: It proposed new fees for F-1 students seeking Optional Practical Training on 7 October 2026, according to The Tribune.
India's stated position is that PERM is separate from the H-1B programme, that existing visa holders keep their status and that it will keep monitoring developments. The US Labor Department has attributed its action to active federal investigations and has not announced when the suspension will end.
Director's Perspective
Way Forward
- Seek written clarity from the US Labor Department on the scope and duration of the suspension, through established diplomatic channels.
- Set up an MEA and embassy helpline that tells affected employees what the suspension changes and what it does not, since H-1B status is unaffected.
- Encourage Indian firms to keep expanding local US hiring and campus recruitment, as TCS and Nasscom have said, to reduce exposure to sponsorship rules.
- Strengthen domestic opportunities for returning professionals through research funding and technology parks, so that mobility becomes a choice.
India's response is measured but sound: it protects current visa holders while objecting to the language used. The suspension covers only the PERM route, a few firms show low exposure, and the MEA has marked what is unaffected. In a Mains answer, credit the careful distinction between PERM and H-1B, then conclude that India should keep seeking clarity through diplomacy and reduce dependence on any single sponsorship route.
GS Relevance
Frequently Asked Questions
What is the US PERM suspension announced on 8 October 2026?
On 8 October 2026 the US Labor Department said it will not accept new Permanent Labor Certification applications or process pending ones from eight companies: Microsoft, Adobe, Cognizant, Infosys, TCS, Wipro, HCL and Capgemini. It cited multiple active federal investigations.
Does the PERM suspension cancel H-1B visas?
No. India's Ministry of External Affairs said on 9 October 2026 that the suspension does not by itself affect the validity of H-1B visas or the status of H-1B holders. It acknowledged that there could be some impact on the green card process of eligible employees.
How did India respond to the PERM suspension?
MEA spokesperson Randhir Jaiswal said on 9 October 2026 that the US steps do not advance the shared ambitions of both countries, called remarks by Vice President Vance on Indian professionals unwarranted, and said India will keep monitoring developments. Nasscom and TCS also responded.
PYQ Practice — Statement Analysis
1 The Permanent Labor Certification (PERM) process is generally a first step before most employment-based green-card petitions in the United States.
PERM is distinct from the temporary H-1B visa programme.
2 The 8 October 2026 PERM suspension cancels all existing H-1B visas of employees of the eight named companies.
The MEA said it does not by itself affect H-1B validity. It may affect the green card process.
3 The Optional Practical Training (OPT) programme allows F-1 international students to work in the US after their studies.
The Department of Homeland Security proposed new fees for it on 7 October 2026.