The United States announced on 8 October 2026 that it is suspending the PERM programme for eight Indian‑headquartered IT giants – Infosys, Tata Consultancy Services, Wipro, Cognizant and HCL. The move follows accusations that these firms misused immigration and labour‑certification rules. The suspension adds to a series of frictions in trade, defence and technology cooperation between the two democracies.
Key Developments
- US halts PERM approvals for the eight firms, citing alleged abuse of the system.
- Indian IT firms have secured over 2,30,000 H‑1B visas and 1,00,000 permanent labour certifications since 2009.
- India’s trade surplus with the US stands at US$33.8 billion in FY 2025‑26, while negotiations on dairy, agriculture and Russian oil imports remain stalled.
- Defence cooperation continues under the 10‑year Major Defence Partnership, but critical supplies like the GE F404 engine for the Tejas fighter are delayed.
- Technology initiatives such as the iCET and the TRUST Initiative remain largely on paper.
Important Facts
• The H‑1B visa programme is a key channel for Indian talent; Indian nationals account for more than 70 % of annual approvals.
• India’s total bilateral trade with the US exceeds US$140 billion in FY 2025‑26.
• Defence purchases from the US total over US$22 billion since 2002, yet co‑production and technology transfer are limited.
• The US continues to press India on dairy, agriculture and Russian oil, while India resists concessions.
Exam Relevance
Understanding this episode helps aspirants answer questions on:
- India‑US foreign policy dynamics (GS2: Polity & International Relations).
- Impact of immigration policies on the Indian IT sector and remittances (GS3: Economy).
- Trade imbalances, tariff negotiations and strategic commodities (GS3).
- Defence procurement, technology transfer and supply‑chain vulnerabilities (GS4: Security).
- Role of multilateral initiatives like iCET and TRUST in shaping strategic autonomy (GS4).
Way Forward
India may consider a calibrated response that protects its strategic interests while avoiding escalation:
- Engage US officials through diplomatic channels to clarify the alleged violations and seek reinstatement of PERM approvals.
- Diversify technology sources and accelerate indigenous defence R&D to reduce reliance on single‑source foreign components.
- Leverage the trade surplus to negotiate better terms on agriculture, dairy and energy, while maintaining a firm stance on Russian oil imports.
- Push for concrete deliverables under iCET and TRUST, with timelines and monitoring mechanisms.
- Strengthen domestic skill development to sustain the IT workforce even if US immigration pathways tighten.
Balancing cooperation with assertiveness will be crucial for preserving a mutually respectful India‑US relationship.