The US Department of Labor has suspended the PERM certification program for eight major tech companies, including TCS, Infosys, Wipro, and HCLTech. The move blocks new permanent residency applications, creating hiring and retention challenges. Despite this, Indian IT stocks rallied on October 9, 2026, as investors assessed that the restriction does not immediately void existing H-1B visas or halt daily operations.
On October 8, 2026, the US Department of Labor suspended the Permanent Labour Certification Program (PERM) for eight major technology companies. This list includes Indian IT leaders Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies, alongside Cognizant, Capgemini, Microsoft, and Adobe. The suspension means these companies cannot currently process new or pending applications for permanent labor certification, which is the essential first step for foreign employees seeking a US Green Card.
Impact on Business and Talent
The suspension does not revoke or invalidate existing H-1B visas. Employees currently working in the US on valid H-1B visas are not affected in their daily operations. The primary risk for these IT service providers is administrative and related to talent retention. Because the Green Card path is currently blocked for new applicants, companies may find it harder to retain high-skilled foreign workers who prioritize long-term residency in the US. This could increase the cost of hiring or lead to higher employee turnover if the suspension remains in place for a long time.
Market and Diplomatic Context
This administrative action coincides with rising diplomatic friction. On October 9, 2026, the Indian Ministry of External Affairs issued a formal rebuke to US Vice President JD Vance regarding his recent comments describing H-1B visa holders as 'indentured servants.' New Delhi described the remarks as unwarranted, highlighting the vital role Indian professionals play in supporting the US technology ecosystem.
Despite the negative headlines and regulatory uncertainty, Indian IT stocks reacted positively on October 9, 2026. The Nifty IT index rose more than 3% during the trading session. Market analysts suggest that investors had largely priced in regulatory risks, and the positive reaction was bolstered by strong recent quarterly results from major players like TCS, which helped calm investor sentiment regarding the actual operational damage of the PERM freeze.
Next Steps for Investors
While the market reaction has been stable, the situation remains fluid. The US Department of Labor has cited investigations into alleged program abuse and a push to prioritize domestic workers as reasons for the suspension. Investors should monitor future filings from these companies regarding any changes in employee retention strategies or legal challenges to the suspension. Any further regulatory actions or extensions of these restrictions into broader visa categories would be important triggers for the sector, as it could eventually impact the cost structure or the availability of talent for critical projects.