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Trump’s Targeting of Indian IT Firms Hits India-US Ties Again

Washington announced last week that it would not accept or process applications from top Indian IT companies for H-1B visas.

Infosys headquarters in Bangalore, India.

Ties between India and the United States hit another bump last week with the Trump administration freezing green card requests from eight technology firms, including those from India.

U.S. Labor Secretary Keith Sonderling announced on October 8 that Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, Capgemini, Microsoft, and Adobe have been suspended from participating in the Permanent Labor Certification (PERM), a program that is largely used by technology companies and outsourcing firms to sponsor a foreign worker’s permanent residency in the U.S. “We will not accept any new or process any pending permanent labor certification applications involving these companies,” Sonderling said.

The announcement came weeks before U.S. Secretary of State Marco Rubio’s visit to New Delhi.

Indian IT companies appear largely unperturbed by the U.S. policy change. Infosys, India’s second-largest IT firm, said it did ‌not anticipate a material impact from the PERM application suspension. The National Association of Software and Service Companies (NASSCOM), India’s IT industry body, said that Indian companies had significantly reduced their dependence on H-1B visas in recent years and had expanded their local ‌hiring ⁠in the U.S. Relatively few workers move from H-1B visas to permanent residency through PERM, it said.

Ajay Srivastava, who heads the Global Trade Research Initiative, a New Delhi-based trade and commerce think tank, said the U.S. move was a “warning for India’s IT industry.” “It covers four leading Indian IT firms and disrupts the permanent-residency plans of their employees, making long-term staffing in the U.S. more uncertain,” Srivastava told The Diplomat.

“The larger concern is India’s dependence on a market that accounts for 54.1 percent of its software and IT-enabled services exports. The measure signals a more protectionist U.S. approach to foreign technology workers. India should prepare for possible restrictions extending beyond green card sponsorship,” he said, adding that Indian firms should widen their export markets to reduce their vulnerability to sudden U.S. policy changes.

India’s software services exports to the U.S. fetched $221.4 billion in revenues in 2025-26, an 8.2 percent year-on-year increase.

Adding salt to injury was a comment by Vice President J.D. Vance. Speaking to reporters after Sonderling’s announcement, Vance said: “Our message to Microsoft is you’re a great American company, but you’ve got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants.”

In a sharply worded statement, India’s Ministry of External Affairs said that “talent mobility adds value to both economies.” The measures announced by the United States “do not advance the shared ambitions of both countries.” Recalling that the U.S. was a country built by immigrants, the statement said that “resorting to terminology that carries painful historical and colonial legacy connotations is deeply offensive.” The allusion was to India’s British colonial rulers transporting more than a million Indians to work as contract labor in British colonies abroad after the abolition of slavery by the British in 1833.

There is speculation in India that the U.S. policy change on green card requests is aimed at showing President Donald Trump’s domestic audience that his administration is tough on immigration. The........

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