Few reactions to Washington’s latest move have been as misleading as that of the senior Congress leader Jairam Ramesh. In a post on X on 9 October 2026, he wrote: “That appeasement of bullies never pays is once again proven by the US Govt’s actions yesterday targeted directly against Indian IT professionals.” India, he added, “has a number of options to retaliate under laws already passed by Parliament.”
He is wrong on all three counts: the freeze was not aimed at Indians alone, there was no appeasement, and the retaliation he proposes would hurt India more than America.
On 8 October 2026, the US Department of Labor suspended eight companies (Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini) from the Permanent Labor Certification programme, known as PERM, with no end date. Labor Secretary Keith Sonderling announced it at a press event alongside Vice President JD Vance. The department will accept no new PERM applications from them, and pending ones have stopped moving. For Cognizant, the move widened a freeze on new filings imposed in early September.
PERM is the labour clearance an employer needs before it can sponsor a worker for a green card, so the freeze falls on thousands of skilled professionals, many of them Indian and many on H-1B visas. The suspension is not a finding that the companies did anything wrong: the department says they are under investigation for possible visa fraud, and no charge has been filed. Nor does it cancel any H-1B visa. India’s Ministry of External Affairs made the same distinction, saying PERM is “distinct from the H-1B visa programme” and that the suspension does not by itself affect existing visas.
Washington’s case is not hard to find. Vance said Microsoft laid off about 6,000 American workers last year after certifying that it could not find qualified Americans, while receiving about 6,300 H-1B visas and filing 3,682 PERM applications, nearly 1,000 of them for the same positions. Sonderling said the firms on the list had received more than 230,000 H-1B approvals and over 100,000 labour certifications since 2009. Microsoft disputes the account, saying about 80 per cent of its roughly 6,000 H-1B applications last fiscal year were to extend or change the status of existing employees. Whether any of it holds up is for an investigation to decide.
What it does not show is a target painted on Indians. Two of the eight companies, Microsoft and Adobe, are American, and two of the IT firms, Cognizant and Capgemini, are headquartered in the US and France. Indians bear much of the cost because they make up most of America’s skilled foreign workforce, not because they were singled out. And the cost is smaller than it looks.
A 2023 Cato Institute analysis counted 1.8 million cases in the employment-based green card backlog, about 1.1 million of them Indian, and estimated that a new Indian applicant in the EB-2 or EB-3 categories could wait 134 years. Indians received about 71 per cent of approved H-1B petitions in fiscal 2024. The people at the centre of this story were already standing in a line most of them would never finish.
That explains the industry’s calm. Nasscom said the number of employees moving from H-1B to permanent residency through PERM is “relatively limited”. TCS says its PERM applications ran to single digits over the past two years. The firms on the list had been cutting their dependence on American visas for years: Cognizant had 3,510 H-1B petitions approved in fiscal 2026 up to 30 June, against 9,413 in 2020, according to US immigration data.
None of this makes the freeze painless for an engineer with a pending case, and on that Ramesh has a point. Long waits already tie Indian workers to one employer for years, and many H-1B holders need a pending PERM case to extend their stay beyond the six-year limit. But for the country as a whole, the damage is smaller than the headlines suggested. The useful question is where the companies will put the work they can no longer settle in America.
The first answer is the Global Capability Centre: a unit a multinational owns and runs in India, doing engineering, research and product development. India has 2,117 GCCs running 3,728 units and employing 2.36 million people, according to the Nasscom-Zinnov report, which puts their FY26 revenue at $98.4 billion. In FY24 the figures were about $64.6 billion and 1.9 million people. A 2024 Nasscom-Zinnov forecast had put GCC revenue at $99–105 billion by 2030; the sector has nearly reached that range four years early. All of this happened before the freeze.
What the freeze does is push along a decision companies were already making. Former HCL chief executive Vineet Nayar has argued that work, rather than people, will move to India. “America is making it harder to move Indian talent there,” he wrote, and the opportunity lies in “architecture, product engineering, cybersecurity, AI implementation”.
As for appeasement, the past year says the opposite. The New York Times, in an article headlined “Modi Is Hedging Against Trump, One Deal at a Time” on 29 August 2026, counted official visits by Modi to at least 20 countries since August 2025, and visits to India by the leaders of 13 countries since December. In January India concluded a free trade agreement with the European Union, one of the world’s largest economies, after nearly two decades of talks. It signed agreements with Oman and New Zealand, and set targets to double trade with France and New Zealand. Older deals came into force: the agreement with Britain, which gives duty-free access to 99 per cent of Indian tariff lines, in July 2026, and the one with the EFTA states, carrying a $100 billion investment commitment, in October 2025. A government appeasing Washington does not spend a year building alternatives to it.
Nor did New Delhi go quiet when the freeze came. The MEA said the US steps “do not advance the shared ambitions of both countries”. Without naming Vance, who had described foreign workers as “indentured servants”, it called terminology with “painful historical and colonial legacy connotations” “deeply offensive”. Ramesh is right that the language was offensive; the government said so, publicly, the next day. That is firm without being panicked, which is how a country behaves when it has options.
Ramesh also says the government imposed charges on UPI merchant payments to please Trump, and that they would benefit American companies. The charges, on select merchant transactions, were due on 15 October. On 13 October the National Payments Corporation of India postponed them until after Diwali, citing the festive season, after merchant bodies and fintechs reportedly asked for more time. He is right about who would gain: Walmart-backed PhonePe and Google Pay handle about 79 per cent of UPI payments. But nothing on the record links the charges to Washington.
The retaliation he wants is the weakest part of his case. The law he points to, the Digital Personal Data Protection Act, lets the government bar companies from transferring Indians’ personal data to countries it names. That power comes into force only in May 2027. Microsoft, suspended from PERM, has committed $17.5 billion to India by 2029 for data centres, AI infrastructure and skilling. Amazon and Google, which are not on the list, have committed more than $35 billion and $15 billion respectively by 2030. Punishing them punishes the very investment the freeze is pushing towards India.
Why now? Part of the answer is the calendar. The US midterm elections are on 3 November, and in an election season policy is partly theatre. Part of it is what India is building. India has designed its first chip for direct-to-mobile broadcasting, which carries television and emergency alerts straight to phones without mobile data. The IndiaAI Mission, with an outlay of more than ₹10,000 crore, is building public AI compute. Whatever its motive, when the world’s largest economy turns this much attention to slowing you down, it is treating you as a rival, not a junior partner. That is an uncomfortable compliment, but it is a compliment.
Will the engineers pack their bags? Mostly not. Some senior professionals stuck in green card limbo will go home or to countries with clearer residency rules. Many others will find another visa route or employer and stay. More still will work for GCCs without ever relocating. For those who might return, the question is whether India has work worth coming back to. A chip designer needs a design centre, an AI researcher needs compute, and a product engineer needs a GCC that gives real ownership. India has begun to build all three.
For two decades, India trained engineers and America absorbed them. Now the host is signalling that the door is closing, just as India has begun to build the rooms to put them in. America’s policy is built for an election. If India’s is built for the decade, it will not be India that pays for Washington’s decision.
