The US H-1B Crackdown and Green Card Suspension: What It Means for Indian IT — and Why GCCs and Remote Work Are the Big Opportunity

A note before I start: my company, Redian Software, helps businesses build Global Capability Centres and remote engineering teams in India and other locations. I have a stake in this topic, so weigh my views accordingly. Nothing here is legal advice — if your visa or green card is affected, speak to an immigration lawyer.

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On 8 October 2026, the United States took its toughest step yet against the visa route that built India's IT industry.

The US Department of Labor announced it was suspending eight companies from the PERM programme — the labour certification that is the first step towards most employer-sponsored green cards. Five of them are among India's largest technology employers: Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Cognizant, along with Capgemini, Microsoft and Adobe.

"We will not accept any new or process any pending permanent labor certification applications involving these companies," said Labor Secretary Keith Sonderling. Asked how long the suspension would last, the answer was: as long as it needs to. Vice President JD Vance accused some companies of advertising jobs ineffectively so they could claim no Americans applied, then hiring cheaper foreign workers instead.

It came at the end of a year in which almost every part of the H-1B system has been tightened, challenged in court or rewritten. For the hundreds of thousands of Indian professionals on H-1B visas, and for the companies that employ them, the message is clear: the old model of moving talent to America is getting harder, slower and more expensive.

But there's a second message, and it's just as important: if talent can't go to the work, the work will come to the talent.

What has actually happened — a timeline

Headlines have blurred several different measures together. Here's what has really changed:

Date	What happened	Status today
Sep 2025	Presidential proclamation imposes a US$100,000 fee on new H-1B petitions for workers hired from abroad; Labor Department launches "Project Firewall" to step up H-1B investigations	Fee blocked by courts (see below); enforcement continuing
27 Feb 2026	The random H-1B lottery is replaced by a wage-weighted selection: higher-paid offers get more chances	In force
31 Mar 2026	FY2027 H-1B selection completed under the new system	Cap reached
8 Jun 2026	A federal court in Massachusetts rules the $100,000 fee is effectively an unauthorised tax	Appeals court refused to pause the ruling in July; appeal still pending
Jul 2026	Green card numbers for Indian applicants in the EB-2 category become unavailable for the rest of the fiscal year; EB-5 numbers for India were already exhausted	Annual limits; new fiscal year began 1 October
25 Aug 2026	DHS proposes a separate, permanent US$103,265 fee on new cap-subject H-1B petitions; the State Department pauses immigrant visa (green card) interview appointments worldwide	Fee only proposed; appointment pause ongoing
30 Sep 2026	A federal court in California also blocks the $100,000 fee and the September renewal of the proclamation	Fee not being collected
8 Oct 2026	Labor Department suspends eight companies from PERM; nine universities face investigation over visa and research issues	In force, no end date

Two things stand out. First, much of the pressure is being fought out in the courts — the $100,000 fee is currently blocked, though the government is pursuing other routes. Second, the PERM suspension is company-specific, not country-specific: it affects people sponsored by the eight named firms, but it lands most heavily on Indians because Indian professionals make up the largest share of H-1B workers and of the employment-based green card backlog.

Side effects for India's IT sector

1. The onsite model is getting more expensive and riskier

For decades, Indian IT firms have relied on a mix of offshore delivery in India and onsite teams at client locations in the US, often on H-1B visas. Higher fees (if they survive in court), stricter wage rules, more audits and now restricted green card sponsorship all raise the cost and risk of the onsite part of that model.

To be fair, the industry has seen this coming. India's IT industry body Nasscom says Indian tech firms have significantly reduced their reliance on H-1B visas in recent years and hire many more local Americans. But the scale of past dependence was large: a Bloomberg analysis estimated that, between 2020 and 2024, Infosys and TCS together had over 16,000 new H-1B hires that would have been hit by a $100,000 fee.

2. Careers and the "American dream" route are narrowing

For many Indian engineers, an H-1B followed by a green card has been the defining career path. That path is now longer and less certain:

• employees of the eight suspended companies cannot start the green card process through their employer for now;
• the wage-weighted lottery favours senior, higher-paid roles, making it harder for younger engineers to win an H-1B at all;
• Indian applicants already face some of the longest green card waits in the world because of per-country limits.

Some professionals will stay and wait. Some will move to other employers or countries. And many — especially experienced ones — will return to India.

3. Reputation and political risk

The suspension was explicitly framed around alleged fraud and abuse. Whatever the merits in individual cases, Indian IT firms now face a reputational challenge in the US, and closer scrutiny of every job advertisement, wage level and visa filing.

4. Uncertainty is itself a cost

Rules that change by proclamation, court ruling and agency notice make long-term workforce planning very difficult. Clients notice — and many will reduce their exposure to visa-dependent delivery models regardless of how individual court cases end.

What it means if you're on an H-1B today

If you work for one of the affected companies, or you're in the green card queue, the most important thing is to understand your own position precisely — and to get advice from a qualified immigration lawyer. Some general points to discuss with them:

• Your H-1B status is not automatically cancelled. The suspension targets PERM labour certifications, not existing H-1B status.
• Know exactly where your green card case stands — whether a PERM has been filed or approved, and whether your I-140 petition has been approved, because that affects your priority date and your options.
• Understand the six-year limit. H-1B extensions beyond six years usually depend on green card steps having been taken, so timing matters.
• Know your mobility options. In many cases, people with approved I-140s can keep their place in the queue if they move to another employer, but the details depend on your individual case.
• Keep your options open. Career paths in India's Global Capability Centres, or in other countries, are stronger than they have ever been.

The opportunity: when talent can't move, the work moves

Here's the part of the story that matters most for India — and for companies everywhere.

1. Global Capability Centres are the big winners

If American companies can't easily bring engineers to the US, many will do the next best thing: build or expand their own teams where the talent already is.

India is already the world's GCC capital. According to the Nasscom–Zinnov India GCC Landscape Report, India hosts 2,117 GCCs employing around 2.36 million people, generating close to US$98 billion in revenue — and more than 500 of the Forbes Global 2000 companies run operations there. Even as traditional IT services firms have cut jobs in 2026, GCCs have kept hiring, adding around 120,000 specialised roles this year.

Analysts have been clear about the direction of travel. Research firm Forrester argued that the $100,000 H-1B fee would ultimately mean higher prices for onsite IT services and more work moving offshore, and surveys suggest a large majority of companies expect to turn to offshoring or nearshoring in response to visa costs.

The newest wave is especially interesting: mid-market GCCs. Nasscom and Zinnov count more than 580 mid-sized companies already running GCCs in India. For a US mid-market firm that can no longer rely on H-1Bs, a 50- or 100-person engineering centre in Bengaluru, Hyderabad, Pune or Noida is now a realistic alternative — often built through a Build–Operate–Transfer partner and taken in-house once it reaches scale.

2. Remote and distributed teams become normal

The pandemic proved that complex software work can be done remotely. Now visa policy is giving companies another reason to embrace it:

• Hire where people live through Employer of Record arrangements, dedicated remote teams or staff augmentation partners.
• Use time zones as an advantage, with India-based teams handling development, testing, operations and support around the clock.
• Keep people you'd otherwise lose. Employees who can't stay in the US can often continue working for the same company from India.

Remote models come with responsibilities — data protection (including India's new DPDP rules), employment law, tax and security — but these are manageable with the right structure.

3. Indian IT services must change shape

For Indian IT companies, this is a push to complete a transformation already underway:

• From onsite headcount to offshore outcomes. Price and deliver by results, not by the number of people at the client site.
• From labour to platforms and AI. AI-led delivery reduces the need for large onsite teams in the first place.
• From visas to local presence. Hire and train more local staff in the US, and build nearshore centres in places like Canada and Mexico for work that needs time-zone overlap.

4. The return of experienced talent

There is also a quieter upside for India. Experienced engineers, architects and managers who return after years in the US bring exactly what India's GCCs most need: global delivery experience, product thinking and leadership. A tighter US door could accelerate a valuable reverse brain drain.

5. Opportunities beyond India

India won't be the only beneficiary. Companies looking to diversify their talent base are also looking at the Philippines, Eastern Europe, Latin America — and increasingly Africa, where countries like Kenya have large pools of young, English-speaking graduates (I've written about Kenya's opportunity here).

A practical playbook

For US companies

1. Map your visa exposure — which roles and people depend on H-1Bs and green card sponsorship.
2. Protect the people you have with legal support and clear communication.
3. Build or expand a capability centre in India or another talent hub for roles that don't need to be onsite.
4. Use a Build–Operate–Transfer partner to move fast and reduce set-up risk.
5. Create remote career paths, so you don't lose good people when visas fall through.
6. Hire and develop local US talent for roles that genuinely need to be onsite.

For Indian IT firms

1. Accelerate the shift to offshore, outcome-based delivery.
2. Invest in local hiring in the US and nearshore locations.
3. Make compliance bulletproof — job advertisements, wage levels and filings will be scrutinised.
4. Offer GCC services — helping clients build their own centres rather than competing with them.
5. Lead with AI-enabled productivity to reduce dependence on onsite headcount.

For Indian professionals

1. Get clear, professional advice on your visa and green card position.
2. Look seriously at GCC roles in India, which increasingly offer global responsibilities and competitive pay.
3. Build skills that travel — AI, cloud, security, data and domain expertise — so you can work for global teams from anywhere.
4. Consider remote roles with international companies.
5. Keep a Plan B country in mind, such as Canada, the UK, Germany, Australia or the Gulf.

For the Indian government

1. Make it even easier to set up and run GCCs, especially for mid-sized companies.
2. Clarify the rules for remote work for foreign employers, including tax and permanent establishment questions.
3. Implement data protection rules predictably, so global clients have confidence.
4. Actively welcome returning talent with programmes that connect them to GCCs, start-ups and research.

Final thought

For thirty years, the H-1B visa was the bridge between India's talent and America's technology industry. That bridge is now narrower, more expensive and more politically charged — and it may stay that way regardless of how the court cases end.

But the underlying reality hasn't changed: global companies need skilled engineers, and India has millions of them. The bridge is simply moving. Instead of people crossing oceans, work is crossing borders — through Global Capability Centres, remote teams and AI-enabled delivery.

The companies and professionals who adapt fastest won't just survive this crackdown. They'll build the next chapter of India's technology story.

Are you or your company affected by these changes? How are you adapting — staying, moving, or building teams in India? Share your view in the comments.

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Sources: Reporting on the Department of Labor's PERM suspension of eight companies by Bloomberg (via BNN Bloomberg), The Detroit News, Newsweek and The Statesman (8–9 October 2026); Business Standard on implications for Indian H-1B workers; court rulings on the $100,000 H-1B fee as summarised by Forbes, DiRaimondo & Schroeder, Ellis, Clark Hill and the University of Colorado and University of Michigan international offices; DHS proposed rule "Fee for Certain H-1B Petitions" (Federal Register, 25 August 2026) and analysis by Ogletree; DHS final rule on wage-weighted H-1B selection, as summarised by Fragomen and Ogletree; US State Department Visa Bulletins and immigrant visa processing updates (2026); Staffing Industry Analysts on Bloomberg's analysis of H-1B fee exposure; Nasscom–Zinnov India GCC Landscape Report (FY2026); Forrester on the long-term impact of the H-1B fee; Outsource Accelerator on 2026 IT layoffs and GCC hiring.