Trump's bid to curb techies may end up benefiting India

The US government's latest restrictions on several major technology and outsourcing companies, including Tata Consultancy Services (TCS), Infosys, Wipro and HCL Technologies, under the PERM programme, is part of the Trump administration’s larger agenda to discourage hiring of Indian tech workers in the US.

While there is still little clarity on how much Trump's restrictions, including the latest restrictions on PERM-based green card sponsorship, can harm Indian IT companies, his war on Indian tech talent can end up yielding an unexpected benefit for the Indian IT sector.

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Vineet Nayar, former CEO of HCL Technologies, has written on X that the restrictions could end up moving more American technology work to India. He argues that the longer-term consequences of Trump's restrictions could be significant because instead of sending Indian engineers to American workplaces, companies could increasingly move the work itself to India. That would open up a bigger opportunity for Indian IT, provided it can move beyond supplying manpower.

PERM restrictions, another turn of the screw

The US Department of Labor has suspended the processing of new and pending PERM applications for several technology companies, including Microsoft, Adobe and major Indian IT service providers. The administration alleges misuse of the system and displacement of American workers, claims that the companies have not necessarily accepted. The suspension forms part of a wider effort to tighten scrutiny of employment-based immigration.

PERM, or Permanent Labor Certification, is an important step in the employment-based green card process. It requires employers to demonstrate that hiring a foreign worker will not adversely affect American workers. The latest action does not automatically cancel existing work visas or prevent every affected employee from working in the US. However, it blocks an important route to permanent residency for employees of the targeted companies and could complicate the plans of workers who have spent years building careers there.

Nayar, in his post on X, cited 117,849 PERM certifications issued last year and said Indian IT companies accounted for fewer than 1,400. His point is that the direct exposure of Indian IT firms to the latest measure may be limited. The larger concern is what repeated restrictions on foreign talent could do to the economics of delivering technology services in the US.

The H-1B crackdown had already set the stage

The PERM suspension is part of a larger ongoing effort by the Trump administration. In September 2025, Trump announced a $100,000 fee for certain new H-1B visa applications, creating fresh uncertainty for companies that depend on bringing skilled foreign employees to the US.

The traditional Indian IT services model relied on sending engineers to client locations in America. Employees worked alongside customers, understood their requirements and helped deliver projects. The work was then distributed between onsite teams and larger offshore teams in India.

Higher visa costs and restrictions on long-term residency make that model more complicated. Companies may have to hire more workers locally in America, but they can also redesign projects so that fewer employees need to travel there. Reuters reported in September last year that industry executives and economists expected the H-1B crackdown to accelerate the movement of critical work to India, boosting the country's global capability centres.

But this shift can't be automatic. Some clients will still require onsite teams, while visa uncertainty could delay projects and hurt Indian IT companies in the short term. But restrictions can strengthen the commercial case for moving work offshore when technology and client requirements permit it.

Also Read|PERM ban is not just an H-1B problem: Who else could lose their green-card path?

From offshore coding to ownership of technology

The bigger opportunity lies in the kind of work India receives. Nayar argues in his X post that the next phase cannot simply be another wave of coding and maintenance jobs. Indian teams need to take responsibility for architecture, product engineering, cybersecurity and AI implementation.

There is already a foundation for this shift. India's global capability centres, or GCCs, have expanded beyond routine support into research, product development and specialised engineering. India is now home to more than 2,000 GCCs, representing more than half the global total. These centres serve multinational companies across sectors, including financial services, manufacturing and pharmaceuticals.

Moving routine coding offshore may help companies reduce costs, but it does not necessarily give Indian teams control over what gets built. Product ownership and architectural responsibility place Indian engineers closer to business decisions. That can increase the value of work performed in India and make the country more than a low-cost delivery destination.

With AI adding another dimension, companies can now automate portions of software development and use smaller teams to deliver work that previously required more people. Indian IT firms that combine AI expertise with deep industry knowledge could win more complex assignments. Those that continue selling primarily on the number and cost of engineers may find themselves under pressure.

GCC takeovers show how the shift can happen

Some recent transactions offer a useful illustration of how technology work can become more firmly anchored in India.

TCS has announced an agreement to take over US retailer Best Buy's India GCC under a multiyear arrangement. The plan is to transform the existing operation into an AI-centred technology and innovation hub. The deal combines Best Buy's retail expertise with TCS's technology and engineering capabilities.

In July, HCLTech announced a $10.5-million acquisition of Guardian Life's India operations, the GCC of the US insurer. The agreement included a fresh seven-year technology services contract. ET reported that nearly 2,000 employees would move into HCLTech under the arrangement. Wipro's $386-million acquisition of Olam Group's technology and digital services business, Mindsprint, is another example. The deal is linked to an eight-year strategic transformation agreement.

These transactions do not prove that US immigration restrictions caused companies to transfer their India operations as the centres were already in India. They do, however, show how global companies can change the ownership and delivery structure of existing technology operations while retaining access to specialised Indian talent.

ET reported a few days ago that more than 20,000 employees had moved from GCCs, enterprise IT subsidiaries and product operations to IT services providers over the preceding 12 months, based on industry estimates. Market researcher Pareekh Jain estimated that around 3,000 of those employees came from pure GCC transitions, with the remainder coming from a broader range of technology operations and carve-outs.

For Indian IT companies, such deals offer established teams, domain expertise and multiyear revenue arrangements. They also create an opportunity to expand the scope of work performed in India.

More business may not mean more jobs

For decades, the growth of Indian IT was closely linked to employment growth. Companies won more contracts and hired more engineers to deliver them. But now AI could weaken that relationship. If smaller teams can deliver more sophisticated projects, revenue and productivity may grow without a corresponding rise in headcount. That would challenge an industry that has traditionally been among India's largest employers of skilled graduates.

The gains may therefore be uneven. Companies with strong AI capabilities and specialised domain knowledge could benefit, while firms dependent on labour-intensive contracts may face pricing pressure. Workers will also need to move into roles that require deeper engineering skills and greater commercial understanding.

There is also a chance that companies may shift work to other delivery locations rather than India, while American clients could resist moving sensitive or business-critical functions offshore. Immigration restrictions alone cannot guarantee a surge in Indian technology exports.

India's opportunity goes beyond Trump's restrictions

Trump's restrictions could accelerate a shift that was already underway. The H-1B fee has increased the cost of moving talent across borders, while the PERM suspension might add uncertainty around permanent residency for employees of targeted companies. At the same time, GCC expansion and technology carve-outs show that multinational companies are rethinking where their technology operations are located and who manages them.

For India, the opportunity is to capture more of that work and move up the value chain. That will require investment in advanced engineering, AI skills and product development, alongside stronger intellectual property ownership and greater responsibility for technology strategy.

The Indian IT industry's future should not be judged only by the number of Indian engineers who get American visas. A more meaningful measure would be how much high-value technology work gets built, managed and owned from India. Trump's restrictions may help accelerate that transition, but Indian IT companies will have to earn the opportunity.