US green card freeze a warning for Indian IT firms, opportunity for GCCs: GTRI

The US suspension of green card applications for eight tech firms, including major Indian IT companies, serves as a warning on US protectionism, urging India to diversify export markets, expand local hiring, and boost Global Capability Centres.

The US suspension of green card applications for eight technology companies is a warning for India's IT industry but could also create opportunities for the country's Global Capability Centres (GCCs), the Global Trade Research Initiative (GTRI) said.

The think tank said the move signals a more protectionist US approach to foreign technology workers and urged India to reduce its dependence on a market that accounts for 54.1% of its software and IT-enabled services exports.

GTRI cautioned that restrictions could eventually extend beyond green card sponsorship to H-1B hiring, skilled-worker mobility and outsourcing.

On October 8, 2026, the US suspended eight technology companies from the Permanent Labour Certification (PERM) programme, freezing pending applications and blocking new ones. The affected companies are Tata Consultancy Services (TCS), Infosys, Wipro and HCLTech from India; Microsoft, Adobe and Cognizant from the US; and Capgemini from France.

PERM is a labour certification process through which employers can sponsor foreign workers for permanent residency, or green cards. The suspension does not itself ban H-1B applications, cancel existing H-1B status or block every route to a green card. The affected companies can continue to apply for H-1B workers under the usual rules.

GTRI said H-1B applications follow a separate process involving a Labour Condition Application (LCA), which could limit disruption to ongoing IT projects. However, the PERM freeze could affect employees seeking permanent residency and companies' long-term workforce planning.

The think tank also pointed to the selective nature of the action. While several major Indian IT firms were included, Amazon, the largest recipient of visas in the ranking cited by GTRI, was not. Google, IBM, Meta, Apple, Intel and Accenture were also excluded. Microsoft and Adobe's inclusion suggests the action extends beyond outsourcing companies, GTRI said.

US market dependence remains a key risk

The restrictions could affect Indian IT firms' US operations and employees seeking permanent residency, although the industry's growing reliance on delivery teams in India may limit the wider impact.

According to the Reserve Bank of India, India's software and IT-enabled services exports totalled $221.4 billion in FY26, of which the US accounted for $119.7 billion, or 54.1%, making it India's largest market.

Globally, 91.7% of India's software and IT-enabled services exports were delivered from India, while 8.3% were delivered by professionals working at overseas client locations.

Applying this split to US exports, GTRI estimated that $109.8 billion was delivered from India and $9.9 billion through on-site work. The think tank cautioned that this estimate uses the global delivery split rather than US-specific figures.

GTRI founder Ajay Srivastava said only a portion of on-site work would depend on employees seeking green cards through PERM.

Indian technology companies have changed their business models over the years by delivering more work from India while expanding local hiring and training in the US, Srivastava said. Their reliance on teams in India and locally hired US employees could help them maintain project delivery despite the green card sponsorship freeze.

Green card freeze could boost India's GCC sector

GTRI said the restrictions could also encourage multinational companies to expand their Global Capability Centres in India. GCCs perform functions such as technology development, research, analytics and other specialised operations for their parent companies.

Of the eight companies affected by the US order, Microsoft and Adobe operate GCCs in India. The other six -- TCS, Infosys, Wipro, HCLTech, Cognizant and Capgemini -- provide IT and consulting services, with several also helping multinational companies establish and operate GCCs.

"If the freeze makes retaining overseas talent in the US harder, companies may move more engineering work, global projects and specialised teams to their India centres," Srivastava said.

GTRI urged Indian companies to diversify their export markets, strengthen delivery from India and expand local hiring where necessary. It also called for greater support for artificial intelligence and higher-value technology work to reduce the industry's vulnerability to sudden changes in US policy.