US PERM suspension may have far-reaching implications for India: Priyank Kharge
Synopsis
The US suspension of the PERM programme — a key green card pathway for H-1B workers — has rattled India's IT outsourcing model. But Karnataka minister Priyank Kharge sees a flip side: if deploying engineers to the US gets costlier, global firms may accelerate R&D and product mandates to India, supercharging GCC growth and pushing India up the tech value chain.
Key Takeaways
Karnataka IT Minister Priyank Kharge on 9 October 2026 responded to the US suspension of the PERM programme for major IT outsourcing firms.
The suspension disrupts a key green card pathway for H-1B visa holders, raising costs and reducing onsite deployment flexibility for Indian IT companies.
Kharge said the move could accelerate expansion of Global Capability Centres (GCCs) in India and attract more R&D , engineering and product development mandates.
He argued India could leverage the moment to move beyond IT services into AI , deep tech , and product innovation.
India currently hosts over 1,700 GCCs , positioning it to absorb higher-value work if US deployment economics worsen for global firms.
Karnataka IT and BT Minister Priyank Kharge on 9 October 2026 said the US government's suspension of the Permanent Labour Certification Programme (PERM) for major IT outsourcing companies could have 'complex and far-reaching implications' for India, simultaneously challenging traditional IT outsourcing models while potentially accelerating the growth of Global Capability Centres (GCCs) and high-value technology work on Indian soil.
The PERM programme is a critical step for foreign workers — including H-1B visa holders — seeking employment-based green cards in the United States. Its suspension by US authorities has set off concern across India's IT sector, which relies heavily on deploying skilled engineers onsite in the US.
Near-Term Challenges for Indian IT
Kharge acknowledged that the suspension could increase operating costs for Indian IT companies with significant US operations, make it harder to retain skilled employees on American soil, and reduce the flexibility companies currently enjoy in deploying Indian professionals at client sites.
These near-term headwinds are considerable: Indian IT majors have long used the PERM pathway to stabilise their US workforce and build long-term client relationships through onsite presence. A disruption to that pipeline directly raises the cost and complexity of doing business in the world's largest technology market.
A Potential Catalyst for GCC Expansion
Despite the challenges, Kharge argued that the development carries a structural silver lining for India. 'If moving Indian engineers to the United States becomes more difficult and expensive, more high-value work may increasingly move to where the talent already is available,' he said.
The minister indicated that such a shift could accelerate the expansion of GCCs in India and prompt global companies to relocate more research and development (R&D), engineering, and product development mandates to Indian cities. This would, in turn, increase domestic demand for senior technology professionals and strengthen India's position in the global technology ecosystem.
India's Opportunity Beyond IT Services
According to Kharge, India has a strategic opportunity to move beyond its established role as a major provider of IT services and emerge as a global centre for product development, artificial intelligence (AI), deep technology, and innovation.
He noted that the implications of the US decision would extend well beyond the immediate operational challenges faced by Indian IT outsourcing firms, potentially reshaping how global technology companies distribute specialised functions across countries. This comes amid a broader trend of multinationals deepening their India footprints, with GCC headcount in the country having grown sharply over the past three years.
Broader Impact on India's Tech Ecosystem
The minister's remarks underscored a dual narrative: restrictions on the movement and retention of skilled Indian professionals in the US could, paradoxically, encourage companies to expand technology operations within India, where a substantial talent pool already exists. Notably, India is currently home to over 1,700 GCCs employing millions of engineers — a base that could absorb higher-value mandates if the economics of US deployment shift adversely.
While short-term disruption for IT service providers appears likely, analysts and policymakers are watching whether this moment becomes an inflection point that draws more innovation-led work to India's technology hubs, particularly Bengaluru, Hyderabad, Pune, and Chennai.
Point of View
And a forced pivot away from onsite-heavy models could indeed deepen that trend. The harder question is timing: near-term pain for Indian IT exporters, who face margin pressure from costlier US operations, could arrive faster than the long-cycle payoff of elevated GCC mandates. What mainstream coverage is missing is the competitive dimension — the same cost-push that may benefit India could equally accelerate hiring in Eastern Europe, Vietnam, and Mexico, all of which are active GCC destinations. Karnataka's ability to capture this moment depends on infrastructure, policy speed, and talent supply at the senior end — none of which can be improvised.
NationPress
9 Oct 2026
Frequently Asked Questions
What is the US PERM programme and why does its suspension matter for India?
The Permanent Labour Certification Programme (PERM) is a mandatory US government process that employers must complete before sponsoring a foreign worker for an employment-based green card. Its suspension for major IT outsourcing firms disrupts a critical pathway used by thousands of Indian H-1B visa holders seeking permanent US residency, raising costs and operational uncertainty for Indian IT companies with large US workforces.
What did Karnataka minister Priyank Kharge say about the PERM suspension?
Kharge said the suspension could increase operating costs for Indian IT firms, reduce flexibility in onsite deployments, and make it harder to retain skilled staff in the US. However, he also argued it could accelerate India's GCC expansion and draw more high-value R&D, engineering and product development work to Indian cities.
How could the PERM suspension benefit India's technology sector?
If deploying engineers to the US becomes more expensive and complex, global companies may increasingly move high-value work — including AI, deep tech, and product development — to India, where a large talent pool already exists. This could strengthen India's role beyond IT services and into global innovation and R&D.
Which Indian cities stand to gain if GCC mandates increase?
Bengaluru, Hyderabad, Pune, and Chennai are the primary beneficiaries, as they already host the bulk of India's over 1,700 GCCs. These cities have the infrastructure and talent base to absorb elevated engineering and product development functions from global firms.
What are the near-term risks for Indian IT companies from the PERM suspension?
Indian IT service providers with significant US operations face higher costs, reduced ability to retain employees on green card pathways, and less flexibility in client-site deployments. These pressures could squeeze margins in the short term before any structural rebalancing toward India-based high-value work takes effect.
