Why in the News
The United States has suspended Indian technology firms from PERM, the labour certification that opens the door to an employment based green card (US permanent residence). Indian IT began retreating from visa dependent delivery years ago, so the real question is whether work moving to India creates jobs for graduates.
What is the PERM suspension, and whom does it hit?
- What it is: PERM (Program Electronic Review Management) is the US Labour Department’s check that no qualified American was available for a job. It works like a no objection certificate for permanent foreign hiring.
- Indian dependence: Indians received over half of all PERM certifications in every full year from 2015 to 2023.
- Existing queue spared: About 3.56 lakh approved Indian EB-2 (advanced degree professional category) petitions awaited visas this June, and they are unaffected. The barrier falls on workers still seeking certification.
- US labour anxiety: Unemployment in computer and mathematics jobs rose to 3.3% in 2025, and software job postings are two thirds below their peak.
- The takeaway: The suspension spares those already queued but makes future settlement harder, which changes where firms place work.
Why had Indian IT already moved away from visas?
- Visa approvals collapse: New H-1B (temporary US work visa for specialised jobs) approvals for TCS, Infosys, Wipro, HCL and Cognizant fell 84% in a decade.
- Shrinking H-1B share: The five firms’ share of initial H-1B employment approvals dropped from 14% to 2.2%.
- US Big Tech rise: Over the same period, approvals for Amazon, Microsoft and Google rose from 2,860 to 7,060.
- New delivery model: Indian firms increasingly hired locally in America and delivered work offshore.
Why may restrictions move work abroad rather than to Americans?
- Offshore option: Firms move work abroad when US hiring and retention get harder. Eg. Microsoft employs over 22,000 people in India and Adobe over 8,000.
- Retention effect: Workers denied settlement prefer employers or countries offering security, so restriction moves work without creating equivalent jobs in America.
- Capability centre jobs: Employment at global capability centres (GCCs), the in house operations of multinationals in India, rose by almost a quarter in two years, to 2.36 million in FY2026.
- Cognizant shift: Since 2018, Cognizant has grown its Indian workforce by about a third and cut its North American workforce to 41,600.
Why will relocated work not automatically help young Indians?
- Hiring slump: Net technology hiring has fallen to under a third of its FY2022 level, even as more work moves to India.
- AI effect: In an Indian Council for Research on International Economic Relations (ICRIER) survey of 651 IT firms, two thirds cut hiring after adopting AI. Over half cut entry level jobs.
- Skills mismatch: Relocated roles favour experienced workers and returnees over the 820,000 engineering graduates India produces yearly.
- Graduate unemployment: Graduates faced 11.2% unemployment last year, over three times the 3.1% rate across all education levels.
- Diaspora cost: The US supplied over a quarter of India’s remittances in 2023-24. Fewer Indians settling there could slow remittances and weaken diaspora networks.
Challenges
- Per country cap: US law caps each country’s share of employment green cards, so Indians already face the longest queues.
- Junior roles shrinking: AI adoption removes the entry level tasks through which fresh graduates traditionally entered IT.
- US market dependence: North America is Indian IT’s largest market, so US curbs strike the industry’s core.
Way Forward
- Higher value centres: Frame an effective policy for capability centres that attracts higher value work such as design and research.
- Predictable rules: Give multinationals predictable tax and transfer pricing rules (the prices one company’s units charge each other across borders), so relocated teams can grow.
- AI skilling: Fund skills that help experienced workers use AI.
- Preserve mobility: Keep negotiating skilled mobility with the US, since diaspora networks carry investment and remittances.
Conclusion
India stands to gain the work US restrictions push offshore, but that work favours experienced hands over fresh graduates. Unless policy turns relocated work into broader opportunity, many young Indians will be left behind.
Key numbers
- PERM certifications to Indians: 51 to 58% of the total each year, 2015 to 2023.
- H-1B approvals, five Indian IT firms: 15,919 (FY2015) to 2,486 (FY2025).
- EB-2 green cards issued to India: 3,916 (FY2024).
- Microsoft’s India investment: $17.5 billion committed over 2026-29.
- Net technology hiring: 445,000 (FY2022) to between 60,000 and 135,000 a year thereafter.
- Remittances: $118.7 billion in 2023-24, 27.7% of it from the US.
Matching Previous Year Question
“[2026, GS2, 15 marks] “India’s global diaspora acts as a living bridge, as a critical economic factor and knowledge network in transforming cultural heritage into geopolitical influence and strategic leverage worldwide.” Critically examine this statement.”
