US visa curbs: Will Indian IT firms shift more technology work offshore?

US visa restrictions and the PERM suspension are adding pressure on Indian IT firms to rethink workforce strategies, potentially accelerating the shift towards offshore technology delivery

Restrictions on skilled foreign workers in the US and the suspension of Permanent Labour Certification (PERM) applications involving eight technology companies could push Indian IT services firms to rethink how they execute projects for American clients.

 

While companies have already reduced their dependence on H-1B visas through local hiring and offshore delivery, the recent restrictions could accelerate the shift towards handling more technology work from India.

 

The US Department of Labor suspended new and pending PERM applications involving Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCLTech and Capgemini on October 8. The move has added uncertainty to the employment-based green card process for Indian professionals working in the US.

  

PERM is the first stage of most employer-sponsored green card applications. The suspension does not automatically affect existing H-1B visas or cancel current employment authorisations. However, it could delay permanent residency applications and create challenges for companies seeking to retain experienced employees.

Indian IT firms have already reduced PERM dependence

The immediate impact on large Indian IT services companies could be limited, given the decline in their PERM applications over the past few years.

 

According to data from Perm Tracker, TCS filed just two PERM applications for the US financial year 2026, compared with 513 in FY25 and 1,804 in FY24. Infosys filed 87 applications in FY24, with no subsequent filings recorded in the data cited by the publication. Wipro filed 257 applications in FY24 and 523 in FY25, while HCL America filed 96, 323 and 59 applications over the last three years.

 

TCS, in a statement issued on October 9, said it did not expect the suspension to affect its workforce strategy or customer engagements.

 

"We have built a significant local workforce across 31 offices and delivery centres throughout the country. As we had announced earlier, we intend to hire an additional 15,000 people in the US over the next five years, to further augment our local workforce. Our PERM applications were in single digits in the last two years and hence we do not expect the suspension of the programme to impact our workforce strategy and customer engagements," the company said.

 

In an earlier interview with Business Standard, Aarthi Subramanian, executive director, president and chief operating officer at TCS, said more than 50 per cent of the company's North American employees, numbering over 30,000, were local hires.

 

"We no longer rely on this mechanism to service our customers because we have shifted towards investing in and hiring local talent," she said.

Why offshore delivery could become a bigger part of the strategy

However, replacing employees deployed from India with US-based hires can be expensive and may not be feasible for specialised technology roles.

 

Kamal Karanth, co-founder of staffing company Xpheno, told Financial Express that replacing deployed employees with local hires at scale would be difficult.

 

"Onboarding local talent at scale, as a replacement for deployed talent is easier said than done. It’s a challenging and expensive undertaking from both a skill-match and a cost-match point of view," he said.

 

Instead, Karanth sees a greater role for offshore and nearshore delivery models, under which companies execute more project work through teams based outside the US.

 

"The more durable shift, in our view, is towards shifting projects and increasing nearshore and offshore delivery structures rather than hiring local talent at scale in the US," he told Financial Express.

 

This could involve restructuring project teams and transferring a larger share of technology development and other delivery responsibilities to Indian centres.

GCCs could see a gradual increase in activity

The shift could also benefit India's Global Capability Centre (GCC) ecosystem, with multinational companies considering expansions of their existing Indian operations or setting up new centres.

 

Avinash Vashistha, chairman and chief executive officer of Tholons, said companies could initially expand their existing GCCs before considering new facilities.

 

"GCC decisions take 6 to 12 months to move from board approval to operations. The first wave will be expansion of existing India GCCs, as companies shift roles they can no longer fill or retain in the US. New GCC set-ups will follow through 2027. This is not a short-term spike. It is a sustained increase in the pipeline," Business Standard quoted him as saying in an article published on October 25.

 

Vashistha also said mid-sized US and European companies in sectors such as healthcare, insurance, retail, manufacturing and energy could consider establishing their own capability centres in India.

 

However, such expansion would take time, given the investment decisions, approvals and operational requirements involved.

Employee retention remains a challenge

The PERM suspension could affect Indian IT companies' ability to retain experienced employees in the US. For professionals who have spent several years working there, employer-sponsored permanent residency is an important part of their long-term career plans. Delays could prompt some to reconsider their employment and location choices.

 

According to a Business Standard report, the suspension is expected to affect around 5,000-6,000 Indian technology professionals and their families who depend on employer-sponsored green cards.

 

Gaurav Vasu, chief executive officer and founder of Unearth Insights, told Business Standard that the immediate revenue impact was likely to be negligible. However, he estimated operating-margin pressure of 10-30 basis points over the next 12 months, mainly because of the costs involved in retaining experienced US-based employees and hiring replacements.

 

If the suspension continues for several years, he estimated that margin pressure could increase to 30-75 basis points.

 

Karanth also told Financial Express that immigration restrictions could affect companies' ability to attract and retain specialised and senior employees.

 

"Operational blockades, suspensions and denials don’t just impact the talent and delivery pipelines, but also impacts scale, quality and velocity of talent that can be attracted and retained," he said.