Why in news?

The US government has suspended several large Indian IT firms (Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini) from a key programme that lets skilled foreign workers gain permanent residency, citing alleged fraud and claiming foreign workers took jobs at the cost of American workers.

This is a major blow for Indian professionals looking to work at these companies in the US. Last month, the US had already announced Cognizant’s suspension, without specifying the allegations, the number of applications affected, or the duration.

What’s in Today’s Article?

• Part of a Broader Crackdown
• Understanding PERM
• How This Affects Indian Workers?

Part of a Broader Crackdown

• This action represents a clear broadening of the crackdown on foreign workers that has become central policy under President Donald Trump.
• Technology and IT services companies face particularly heightened scrutiny over their reliance on foreign workers.
• US authorities have stepped up investigations into alleged misuse of both the H-1B and PERM programmes, including claims of:
  • Wage undercutting
  • Fraudulent filings
  • Displacement of American workers
• This scrutiny matters enormously for Indian professionals, who account for a large share of H-1B beneficiaries and employment-based Green Card applicants.
• The US administration’s core justification is that foreign workers hired by these companies reduced job opportunities for Americans.
  • As per a report, since 2009, the impacted companies have requested permanent residency for almost 3 million foreign workers, receiving over 230,000 H-1B visa approvals and over 100,000 permanent labour certifications.
  • The US administration characterised this as hundreds of thousands of jobs that were taken from American workers.

Understanding PERM: The Programme at the Centre of This

• PERM (Program Electronic Review Management) is the system through which employers generally obtain labour certification before sponsoring a foreign employee for an employment-based Green Card.
• Key Features
  • Unlike a visa application (made primarily by an individual), PERM filing is done by the employer on behalf of the worker.
  • Before filing, the employer must obtain a prevailing wage determination for the position and carry out prescribed recruitment.
  • The process is meant to establish that permanently hiring a foreign worker will not adversely affect job opportunities, wages, or working conditions of US workers.
  • Once the Labour Department certifies the application, the employer can proceed to the next stage of the Green Card process.
• PERM vs H-1B — An Important Distinction
  • H-1B is a temporary, non-immigrant work visa allowing US employers to employ foreign professionals in specialty occupations.
  • PERM is part of the process for obtaining permanent residency — a fundamentally different track.

How This Affects Indian Workers?

• For employees whose Green Card process hasn’t yet reached the PERM filing stage: The immediate consequence is delay.
  • They cannot make fresh PERM filings while the suspension is in place.
  • This means they cannot secure a priority date or begin moving through the employer-sponsored Green Card process.
• Why This Hits Indians Especially Hard: India already faces a severe backlog.
  • In the US State Department’s September 2026 Visa Bulletin, the EB-2 category (Employment-Based Second Preference) for India was listed as “unavailable” for final action.
  • The EB-3 final-action date was January 1, 2014 — meaning applicants from over a decade ago are still being processed.
  • The system also imposes per-country limits on employment-based Green Cards, disproportionately affecting high-demand countries like India.
• An Additional H-1B Complication
  • US rules allow certain H-1B holders to extend their stay beyond the normal six-year limit if a labour certification was filed sufficiently early.
  • For workers approaching this six-year deadline, being unable to start the PERM process could become a serious problem.
  • Workers who already have approved petitions and are merely waiting because a Green Card number is unavailable are in a different position — they can, subject to rules, still qualify for H-1B extensions of up to three years at a time.

Conclusion

The PERM suspension doesn’t cancel existing Green Card queues, but it freezes new entries into them — and for Indian applicants already facing a decade-plus backlog, a freeze functions much like a setback.

Framed by Washington as closing a fraud loophole, the move lands squarely on the companies and workers most dependent on this pathway: Indian IT professionals, for whom the priority date is often the only thing standing between temporary status and permanent residency.