The suspension, announced this month, freezes new and pending applications under the Permanent Labor Certification Program (PERM), a key route for H-1B visa holders to transition to permanent residency and eventually citizenship. Indians hold a majority of H-1B visas, and the move aligns with President Donald Trump's push for stricter skilled-worker immigration rules.
Industry analysts say the commercial impact on the affected firms is likely to be limited. Nasscom, the trade body for India's technology industry, said Indian companies have reduced reliance on H-1B visas and are hiring more locally, meaning "the number of employees transitioning from H-1B visas to permanent residency through the PERM process is also relatively limited." Wipro said more than 80% of its US workforce is locally hired, while Tata Consultancy Services reported its PERM applications were in single digits in the last two years. Microsoft said it has filed H-1B petitions mostly to retain existing staff, not to import new workers. According to a Business Standard report citing PERM Tracker, TCS's PERM filings fell to two in 2025-26 from 513 the previous year and 1,804 the year before, with no records found for Infosys and Wipro for 2025-26.
Brokerage HDFC Securities said the impact on revenue would be minimal, even if higher-paid American workers replace those on PERM-linked roles. A US-based senior executive with one of the eight firms told the BBC that the restriction will "not break the business," but the impact is more "intense" at a human level. "A good number of people we know are stuck in a space where they have spent some years in the US but their green card application hasn't moved. Even if they are ready to move back to India, their children don't want to because they grew up here," he said.
The decision comes amid heightened political rhetoric. US Vice President JD Vance referred to H-1B holders as "foreign indentured servants," a remark he later called "imperfect" but which India's foreign ministry labelled "unwarranted" and "deeply offensive" for its colonial connotation. Researchers at Stop AAPI Hate say anti-South Asian online sentiment has sharply increased since the 2024 US election, with Indian immigrants and H-1B visa holders frequent targets.
For affected workers, options are narrowing. Poorvi Chothani, founder of immigration law firm LawQuest, said many came to the US borrowing heavily to study and build careers. As rules tighten, they have fewer options and less ability to absorb the costs. Some are considering the EB-5 investor route, which requires at least $800,000 in eligible US enterprises, but may lack the capital. Stanford Immigration Policy Lab fellow Ahmet Gulek noted that switching to a firm not covered by the suspension is uncertain, given "the fear of retaliation," and warned that other exemption categories "may be targeted next."
Nearly one million Indian nationals were waiting for employment-based green cards as of December 2025, representing 79% of the total backlog, according to the National Foundation for American Policy, with projected wait times ranging from five to 179 years for highly skilled Indians filing from January 2026.
The suspension may face federal court challenges, as did an earlier $100,000 fee on certain H-1B petitions that courts struck down. The administration has also proposed a $70,000 fee for universities recommending international students for post-study work programmes. Some research suggests restrictions could push jobs to India rather than American workers, with industry players reporting increased offshoring. As one anonymous technology executive put it, "Companies benefit from cost arbitrage when they move work offshore."
Experts say America's appetite for Indian tech talent is unlikely to disappear, but its approach to tapping it may be changing. For Indian professionals, that could mean rewriting the script about building a future in the US.