On October 8, 2026, the US Department of Labor announced that eight large companies can no longer use a key step in the employer-sponsored green card process. The eight companies are TCS, Infosys, Wipro, HCLTech, Cognizant, Capgemini, Microsoft and Adobe. The PERM suspension has understandably caught Indian investors’ attention, since the US is the biggest market for Indian IT companies.
So what has actually changed, who is affected, and should investors be worried? This article explains the facts in simple terms and looks at what the move could mean for Indian IT stocks.
What Happened on October 8
- The US Labor Secretary, Keith Sonderling, announced the suspension alongside Vice President JD Vance.
- The Department of Labor said it will not accept new applications from the named companies, and it will not process pending ones.
- The announcement linked the action to ongoing criminal investigations led by the department’s Inspector General.
- US officials have raised concerns about alleged misuse of foreign-worker programmes and the impact on American workers.
These are allegations made by the US government. They are not findings of wrongdoing against every company on the list.
What Is PERM?
PERM stands for Program Electronic Review Management. It is the first step in the employer-sponsored green card process in the US.
- The employer must show that no qualified US worker is available for the role.
- Only after this certification can the employer move ahead with the next stages of a green card application.
- PERM approval does not guarantee a green card. It is one stage in a longer process.
- PERM is separate from the H-1B visa, which allows employers to hire foreign workers in specialised roles.
Which Companies Are Affected?
The eight companies named by the US are:
- Tata Consultancy Services (TCS)
- Infosys
- Wipro
- HCL Technologies
- Cognizant
- Capgemini
- Microsoft
- Adobe
Six of these are IT services and outsourcing firms. Microsoft and Adobe are US technology companies, which shows that the action is not aimed only at Indian businesses. Vice President Vance specifically criticised Microsoft, saying it should hire more American workers.
What Changes for Employees and What Does Not
The suspension affects the green card pathway, not the right to work in the US today.
What changes
- The named companies cannot start new PERM filings for their employees.
- Pending PERM cases at these companies will not be processed for now.
- Employees who were waiting to begin the process may not be able to set a priority date. This date decides a person’s place in the green card queue, which is already long for Indian nationals.
What does not change
- Existing H-1B visas remain valid, according to India’s Ministry of External Affairs.
- Employees who already hold green cards are not affected by the announcement.
- Clients can continue to be served by employees already working in the US, so the direct impact on revenue looks limited.
SBI Securities also pointed out that the action relates to permanent residence applications and does not cancel current H-1B visas.
How Companies and the Indian Government Responded
- TCS: In a filing, the company said its PERM applications were in single digits over the last two years. It does not expect the suspension to affect its workforce strategy or client engagements.
- Nasscom: The industry body said relatively few employees move from H-1B to permanent residency through PERM. It added that Indian technology companies will continue to follow applicable US rules.
- Ministry of External Affairs: India said it is aware of the decision and that the steps announced by the US do not advance the shared ambitions of both countries.
How Indian IT Stocks Reacted
Many people expected a sharp fall in IT shares. The first trading day told a different story. On October 9, the Nifty IT index rose around 3%, and TCS shares gained more than 5%. Investors were also focused on TCS’s quarterly results that day, so the move cannot be linked to the PERM news alone.
A single day of trading is not a clear signal. The longer-term picture depends on how the situation develops.
What It Could Mean for Indian IT Stocks
The direct revenue impact looks small for now. The risks are indirect, and analysts are watching these areas:
- Retention costs: Green card sponsorship is a major reason employees stay with one company for many years. If sponsorship stops, attrition and salary pressure in the US could rise.
- Margins: More local hiring or higher pay means higher costs. Margins of Indian IT companies are closely watched by the market.
- Policy risk: Investors may worry that this is a first step. Further changes to H-1B fees, wage rules or more suspensions could follow, and uncertainty alone can weigh on valuations.
It helps to remember that the US contributes a very large share of Indian IT exports, estimated at around 70% by recent market reports. Any change in US policy therefore gets attention, even when the immediate effect is limited. If you are trying to understand where this sector fits within a larger investment approach, you can read our analysis of Indian IT sector stocks.
What Investors Can Watch Next
- Whether the US adds more companies to the suspension list
- Any move on H-1B fees or wage rules
- Quarterly commentary from Infosys, Wipro and HCLTech on attrition, local hiring and margins
- Any legal or enforcement action that follows the investigations
- Further statements from the Indian government and Nasscom
News like this moves quickly, so it is worth following verified updates rather than social media summaries. At TejiFactor, we regularly break down market-moving developments like this one, and you can find more such explainers in our blogs.
Key Takeaways
- The real risks are higher retention costs, margin pressure and policy uncertainty.
- The US suspended eight companies from the PERM programme on October 8, 2026.
- PERM is the first step of the employer-sponsored green card process. It is not the green card itself.
- This announcement does not cancel existing H-1B visas.
- TCS has said it expects no material impact, and Indian IT stocks rose on the first trading day.
Disclaimer: This article is for educational and informational purposes only and should not be treated as investment advice. Investments in securities markets are subject to market risks. Please read all scheme-related documents carefully and consult a qualified financial advisor before making any investment decision.