The suspension of the permanent labour certification (PERM) process in the US could add yet another layer of uncertainty for Indian IT services companies, already grappling with tighter immigration rules and rising costs of deploying talent onshore.
Although Indian IT companies have reduced their dependence on the US H-1B visa programme, the PERM suspension could add to existing immigration-related challenges. Below are some immediate implications of the PERM suspension for Indian IT companies:
1. Offshore/nearshore delivery or local hiring: Indian IT services companies may accelerate the shift towards offshore delivery centres in India or nearshore locations like Poland and parts of Europe to reduce dependence on employees that require long-term US immigration pathways. Alternatively, they may be forced to increase local hiring in the US to maintain on-site client delivery.
2. Increased competition for talent and onshore contracts: Indian IT firms affected by the suspension could face greater competition from their global counterparts that were not subject to the same restrictions. Competitors with a larger pool of locally available talent may find it easier to secure contracts requiring on-site presence, putting pressure on Indian firms’ market share and deal wins.
3. Outflow of experienced professionals from the US: Uncertainty over permanent residency could prompt IT professionals of Indian-origin to explore opportunities outside of the US. They may either return to India or look at countries with more predictable long-term residency pathways. Indian IT companies could lose experienced and senior employees from their US operations.
4. Decline in student immigration: If uncertainty over long-term employment and permanent residency prospects persists, Indian students may reconsider pursuing technology degrees in the US. Over long term, this could affect the pipeline of Indian graduates entering the US tech workforce and encourage them to consider destinations like Canada, the UK, Germany and Australia.
5. Higher employee costs and margin pressure: Companies may need to hire more US-based professionals, or spend more on relocating employees and delivery teams. These additional costs could weigh on operating margins, particularly for firms with significant on-site delivery requirements.
6. Competitive disadvantage in attracting and retaining senior talent: Experienced IT professionals who prioritise long-term residency in the US may prefer employers offering more predictable immigration pathways. Indian IT firms could increasingly find it harder to attract senior specialists for US-based roles.
Published on October 9, 2026
