PERMafrost without bite: Indian IT must stop treating every US rule change as a crisis to be lobbied away, fix lies elsewhere

On Thursday, with J D Vance beside him at the White House, US Labour Secretary Keith Sonderling suspended 8 companies - Microsoft, Adobe, Cognizant, Infosys, TCS, Wipro, HCL and Capgemini - from the Permanent Labour Certification Programme (PERM), the labour certification at the front of most employment-based green card cases. The Department of Labour will not take new applications from them, and has frozen the ones already pending.

Six of the 8 run their delivery engines largely out of India. The other two are US product giants, included, one suspects, to blunt the charge that this is only about India. It isn't. But Indians will pay most of the bill.

None of the suspended firms has been charged with anything, and no end date has been set. The Trump regime's case rests on aggregates. Sonderling said the 8 had sought nearly 3 mn foreign workers since 2009, and won over 2,30,000 H-1B approvals. Big numbers are not evidence of fraud. Even at the libertarian Cato Institute, the argument is that the department cannot legally suspend a company before proving it broke rules. Courts may agree. But business does not wait for courts.


Human costs land first. An Infosys engineer on an H-1B already faces a queue measured in decades. India's EB-3 cut-off sits around Jan 2014, and EB-2 has been unavailable. Now, even the first step is frozen. Clearly, one will witness quiet resignations, moves to US employers not on the list, and families rethinking whether to stay on in the US. Some of that talent will go elsewhere, including come back to India.

For the companies, the operational hit is smaller than the headlines suggest. Indian IT has been weaning itself off visas for years, hiring locally and pushing more work offshore. Cognizant's H-1B approvals fell from 9,413 in 2020 to 3,510 this year. The more serious damage is to reputation. Being named at a White House podium in the same breath as 'fraud' is the kind of thing a procurement committee in Ohio remembers. Markets have already flinched once: Indian IT stocks lost about ₹55,000 cr in a single session after Cognizant was suspended last month.

Then there's diplomacy. New Delhi has spent the past year keeping its trade conversation with Washington civil even with US tariff and visa-fee shocks. Services are India's strongest card in that bargaining, and the US has just shown it can act against them unilaterally. GoI should press, quietly, for due process: specific allegations, a timeline, and a way for stranded workers to move their cases. Skilled mobility belongs on the formal trade agenda.

Every time the US has tightened its door, work, rather than people, has moved towards India. The industry also gets rattled by the unexpected pushbacks and reevaluate their strategies. If a US bank cannot easily bring an Indian architect to New Jersey, it will build the team in Hyderabad. India already hosts 2,117 GCCs, which employ 2.36 mn people and earn $98.4 bn. They are set to hire over 5 lakh people this year, and nearly two-thirds of those roles need AI or data skills.

AI was rewriting the arithmetic anyway. The old model of billing bodies by the hour on a client site was dying before Sonderling spoke. Coding agents are compressing the very work that once justified flying engineers across oceans. What stays valuable is judgement, domain depth and the ability to build products. None of that needs a green card.

So, Indian IT should stop treating every US rule change as a crisis to be lobbied away. Firms must move from staffing to platforms and IP they own, and partner GCCs, rather than fight them for crumbs. States courting GCCs to Jaipur, Coimbatore and Ahmedabad need to fix power, transit and campuses. Others like Assam and West Bengal also should get on this bandwagon and prepare their invites. Returning engineers need risk capital and research money that make coming home feel like a promotion.

Washington has locked a door. India's mistake would be to keep knocking.