UPSC Darpan

International RelationsGS29 October 2026

US suspends Cognizant, Infosys, Tata, Wipro, HCL and Capgemini from PERM labour certification

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The news

Washington. US Secretary of Labor Keith Sonderling announced on October 8 that “some of the largest IT outsourcing firms in the world — Cognizant, Infosys, Tata, Wipro, HCL and Capgemini” are suspended from the Permanent Labor Certification Program (PERM), The Indian Express and The Hindu (Reuters) report; the official notice is not reproduced. Microsoft and Adobe are also suspended. PERM is the first step of an employment-based green card: the employer, after a prevailing-wage determination and a recruitment test, must show the Labor Department that hiring a foreign worker permanently will not hurt US workers. “We will not accept any new or process any pending” applications, Mr. Sonderling said, citing fraud; he claimed these firms got over 2.3 lakh H-1B approvals and over one lakh labour certifications since 2009. Without a PERM filing, a worker gets no “priority date”, a place in the green-card queue.

The chain in one line: Curbs on foreign workers become central US policy → scrutiny of H-1B use by outsourcing firms → Cognizant suspended from PERM in September → six IT firms, Microsoft and Adobe suspended on October 8 → Indian workers cannot enter an already long green-card queue

Static syllabus linkage

  1. H-1B is temporary; the green card is permanent, and the queue is capped by country. The H-1B is a non-immigrant visa for specialty occupations, granted for three years and extendable to six, with an annual cap of 85,000. A green card gives permanent residence; employment-based cards usually need PERM, then an immigrant petition. US law limits any one country to 7% of employment- and family-based green cards a year, which creates India’s backlog.
  2. GATS Mode 4 covers temporary, not permanent, movement of workers. The WTO’s General Agreement on Trade in Services defines four modes of supply; Mode 4 is the temporary presence of natural persons, such as an engineer posted abroad. Its Annex on Movement of Natural Persons excludes measures on citizenship, residence or permanent employment. Green cards therefore lie outside India’s WTO claims.

Why UPSC loves this

  1. Migration rules are a GS2 test of developed-country policy. The syllabus names the “effect of policies and politics of developed and developing countries on India’s interests” and the “Indian diaspora”. Visa curbs touch both.

Prelims nuggets

  • Mode 4 of the GATS refers to the temporary presence of natural persons to supply a service in another member’s territory.
  • PERM labour certification is administered by the US Department of Labor, not by the immigration service.
  • US law limits nationals of any one country to 7% of preference green cards issued in a year.

Analysis

  1. The blow falls on tomorrow’s workers, not today’s. Workers with approved petitions can still extend their H-1B for up to three years at a time. Those whose PERM was not filed cannot get a priority date, and H-1B holders near the six-year limit can extend only if certification was filed early. Firms may simply shift work to India, defeating the policy’s aim.
  2. India has no legal remedy, only bargaining. Because permanent residence falls outside GATS, India cannot take this to the WTO. Framing it as anti-fraud enforcement, with Microsoft and Adobe also named, makes it hard to contest without case facts. India’s leverage lies in trade talks, where mobility can be traded against market access.
  3. Lens — Strategic autonomy and partnership: protest the method, keep the partnership. Retaliation would hurt Indian firms that depend on the US market. A sensible line seeks the specific allegations and due process for each firm, while firms hire locally and diversify markets, so one policy does not define the relationship.

Possible Mains question

Restrictions on skilled migration in developed countries can hurt India as much as tariffs. Examine with reference to recent US action against Indian IT firms. (15 marks, 250 words)

Model approach

  1. Directive — Examine. Weigh evidence on both sides, then judge.
  2. Introduction — the PERM suspension of six IT firms. Explain PERM as the first green-card step.
  3. Body — mobility is India’s comparative advantage, so curbs act like tariffs. Value addition: Sonderling’s figure of over 2.3 lakh H-1B approvals since 2009; draw the H-1B → PERM → priority date → green card path, marking the block.
  4. Body — but offshoring softens it, and Mode 4 excludes permanent migration, so diplomacy is the only route. Delivery from India keeps earnings; link to trade talks.
  5. Conclusion — negotiate mobility, diversify markets. Write mobility into trade deals and widen beyond the US.

Administrator's brainstorm

An interview board asks: should India retaliate against the US suspension of Indian IT firms?

No. Retaliation would hurt Indian firms and workers more than the US. India should seek the allegations, insist on due process and press for mobility in trade talks, while firms localise hiring.