The US suspension of the Permanent Labour Certification Programme (PLCP) for eight major information technology companies could raise costs for Indian firms and disrupt the movement of skilled professionals, Karnataka Information Technology and Biotechnology Minister Priyank Kharge said on Friday. He also said the decision could accelerate the shift of higher-value technology work to Indian cities.
In a post on X, Kharge said the action would create challenges for the traditional Indian IT outsourcing model. Indian companies operating in the United States could face higher costs, greater difficulty retaining skilled employees and reduced flexibility in deploying Indian professionals at client locations, he said.
“For the traditional Indian IT outsourcing model, this is clearly a headwind. It could mean higher operating costs in the United States, greater difficulty in retaining skilled employees and reduced flexibility in deploying Indian professionals onsite,” Kharge said.
The PLCP is a critical step in the US employment-based green card process for foreign workers, including holders of H-1B visas. The United States announced on Thursday that eight IT firms, including Microsoft, Tata Consultancy Services, Infosys and Wipro, had been suspended from the programme. The action was announced by US Vice President J D Vance, Labour Secretary Keith Sonderling and Attorney General Todd Blanche under the US Anti-Fraud Task Force.
The US administration said the practice had shut out American workers from the job market. The suspension therefore affects both the employment-based immigration process and the way Indian technology companies retain and deploy employees in the US.
Kharge said the immediate pressure on overseas deployment could create opportunities for India’s technology sector. If it becomes more difficult and expensive to move Indian engineers to the United States, more high-value work could be located where the talent is already available, he said.
That shift could support the expansion of Global Capability Centres in India, along with research and development, engineering and product development operations. Kharge said the change could increase domestic demand for senior technology professionals and strengthen India’s position in product development, artificial intelligence, deep technology and innovation, rather than limiting the country’s role to traditional IT services.
For Karnataka, which houses a major concentration of India’s technology activity, the issue links immigration policy in the United States with the location of jobs and investment in Indian cities. The minister’s assessment points to a potential change in how companies divide work between overseas client locations and domestic technology centres, although the report does not establish the scale or timing of any such shift.
The suspension places additional uncertainty around the operating model used by Indian IT companies with large US businesses. The immediate consequences identified by Kharge are higher operating costs, employee-retention difficulties and reduced onsite deployment flexibility, while the possible opportunities include more global research, engineering and product work being performed in India.
