Eight companies suspended from PERM, with no end date
Labor Secretary Keith Sonderling announced the Trump administration's action on 8 October 2026, alongside Vice President JD Vance. As reported, the Department of Labor will not accept new, or process pending, permanent labor certification (PERM) applications involving the eight named companies, citing multiple active federal investigations. PERM is the labor-market test an employer has to pass before it can sponsor a foreign employee for an employment-based green card. Officials framed the action around American jobs, and said that since 2009 the eight companies had together requested nearly three million foreign workers, received more than 230,000 H-1B approvals and obtained more than 100,000 permanent labor certifications.
Two details matter for American readers. First, this isn't only about Indian IT firms: Microsoft and Adobe are on the list too. Second, it didn't arrive on its own. Cognizant's PERM filings had already been suspended in September 2026. And in September 2025 the administration imposed a $100,000 payment on certain new H-1B petitions for workers outside the US. Courts have since blocked collection of that payment, but on 18 September 2026 a new proclamation extended the policy to 21 September 2027, and the government is appealing.
A green-card step, not a ban on Indian engineers. But read the direction.
It's worth being precise, because a lot of the first-day commentary isn't. This is a suspension from one step of the green-card process for eight employers. As reported, it doesn't cancel anyone's existing H-1B status, and it doesn't undo labor certifications or I-140 petitions that were already approved. It says nothing about the quality of anyone's engineering, and the investigations behind it are unresolved. None of this is legal advice. Anyone whose own case is affected should talk to immigration counsel.
For an American company buying engineering, the individual rule matters less than the pattern. A $100,000 payment attached to new H-1B petitions in 2025, extended in 2026 even while the courts block it. One major services firm suspended from PERM in September 2026, eight more in October. Each step makes the same model slower, costlier and less predictable: moving an engineer from India to the US to do work that could, in many cases, be done from India. After the H-1B fee was announced, Forrester expected "increased offshoring, with Indian professionals and major IT vendors likely to intensify hiring and client support from India and other offshore countries." The PERM suspension pushes in the same direction.
The policy is asking American companies to hire American workers for American roles. Most software delivery was never a role that had to sit in America. It was a team that had to be accountable.
Split the roadmap by where the work needs to happen, not by where the visa lands
The practical response isn't a new visa strategy. It's an honest sort of your engineering roadmap into two piles.
- Work that genuinely needs to be onsite. Customer-facing roles, work inside facilities or on hardware, systems that legally can't leave a US environment, and leadership that has to sit with the business. Hire for these in the US. That's what the policy is asking for, and it's usually right on its own merits.
- Work that only needs to be accountable. Building and testing product, modernizing legacy applications, data and AI pipelines, integration work, QA, and ongoing support and maintenance. None of this has to happen in a US office. It has to happen in your repositories, inside your sprint, with named engineers who answer for it.
For many product and platform teams, the second pile is the larger one. The H-1B route was never the only way to staff it. It was a habit, and the last year has made that habit expensive and uncertain.
Three ways to run software delivery from India
US companies moving delivery offshore generally choose between three models. None is right for everyone.
- Your own Global Capability Center (GCC). You set up and run an entity in India with your own employees. You get maximum control, and it's the model several large US tech companies have been expanding in India. It also means an Indian legal entity, local hiring, facilities and management overhead before the first sprint ships, so it suits companies with long-term, large-headcount plans.
- An offshore development center (ODC) with a partner. A dedicated team of named engineers works only on your product, in your tools and your process, while the partner carries hiring, payroll, facilities, security and compliance. You don't need your own entity in India, it can start far sooner than a GCC, and it scales with the roadmap. It's a common starting point for mid-market and growth-stage companies.
- Build-operate-transfer (BOT). A partner builds and runs the team, then transfers it to your own entity once the work and the economics are proven. It's a way to reach a GCC without carrying the setup risk on day one.
Project-based outsourcing, where a vendor takes a fixed spec and returns a deliverable, still has its place for well-bounded work. It's the weakest fit for an evolving product, because the people writing the code are separated from the people who hear about the bug and the changed requirement.
Seven concerns US companies raise about offshore development, answered plainly
- "The time difference will slow us down." India is nine and a half to thirteen and a half hours ahead of the continental US, depending on the coast and the season. A US East Coast morning is an Indian evening, so a fixed daily overlap window is realistic, and work can move forward while your US team is offline. Agree the overlap hours, and who covers them, before the first sprint.
- "Is our code and data safe?" Ask for an independently audited security certification, not a promise. ISO 27001 is the international standard for an information security management system, and ISO 27701 adds privacy controls for personal data. If your vendor-risk team usually asks for a SOC 2 report, check whether it will accept ISO 27001 certificates and statements of applicability instead, since they're different frameworks.
- "Who owns the code?" You should. Put an assignment of intellectual property in all code and deliverables in the contract, and keep the code in your own repositories from the first commit, so ownership never depends on a handover.
- "Do we need a company in India?" Not with a partner-run team. You contract with the partner, and the partner employs the engineers. You only need your own Indian entity if you choose a GCC, or when a build-operate-transfer team transfers to you.
- "What if our engineers keep changing?" Insist on named engineers, advance notice before anyone rotates off, and documentation kept in your systems as part of the definition of done, so knowledge stays with the product rather than the person.
- "What will it really cost, and in what currency?" Ask for published or written ranges before any call, and check the billing currency. Many Indian firms invoice in INR, which means your cost moves with the exchange rate.
- "Is outsourcing itself about to be taxed?" A Senate bill, the HIRE Act (S. 2976), proposes a 25% excise tax on certain outsourcing payments and would remove their tax deduction. It was introduced in October 2025 and, as of this writing, has not advanced beyond introduction. It isn't law, but check its status, and take tax advice, before you sign a multi-year contract.
Six questions that separate a delivery partner from a body shop
If you're evaluating an offshore software development company in India this quarter, these are the questions we would ask of any vendor, including us.
- Can we see the certificates? Copies and validity dates, not a slide with logos on it.
- Is the delivery process audited? A CMMI appraisal or ISO 9001 certification means estimation, review and release discipline are checked by someone other than the vendor.
- Has the team run production systems, or only built them? Building is the easier half. Ask what they've kept running, for how long, and at what scale.
- Can they work inside our sprint? Same standup, same backlog, same codebase. A separate vendor sprint that delivers into yours is where context gets lost.
- Can we start small? A pilot team on one real piece of the roadmap tells you more than any proposal.
- What's the exit plan? Documentation, knowledge transfer and handover terms should be written down on day one, not negotiated on the way out.
Engineers embedded in your team, delivering from India, accountable like they're down the hall
We'll be direct about why we're writing this. Data has operated from Jaipur since 1999, and has an office in Dallas, Texas. We've also been openly critical of the classic offshore dev-shop model, where a requirements document goes over the wall and a team you never talk to sends something back weeks later. That criticism still stands, and it's the point: the problem with that model was never where the engineers sat. It was the wall between them and the people who own the product. Take the wall away and India is simply where the team works.
That's how our Forward Deployed Engineering teams work. They have worked embedded inside the Government of Rajasthan's production systems for years: on RajSevaDwar, the state's data-exchange layer connecting 40+ departments and 1,150+ services, since 2015, and on IFMS 3.0, the treasury and disbursement system spanning 67+ departments, since 2021. Those are systems that can't go down for a rewrite.
For a US company, that means a team that starts as small as three engineers, works fully remote from India, and sits inside your standup, backlog and codebase rather than behind a ticket queue. Nobody has to relocate, and nobody needs a US visa.
- Audited process. CMMI Level 3, and ISO 9001, ISO 27001, ISO 27017, ISO 27018, ISO 27701, ISO 20000-1 and ISO 22301 certifications, all listed with validity dates on our certifications page. Certificate copies are available on request.
- Published pricing. Our rate card lists Forward Deployed Engineers at INR 150,000 to 300,000 per engineer per month, roughly $1,550 to $3,150 at the indicative exchange rate shown there. We invoice in INR by default, and can invoice in USD on request.
- AI-ready delivery. We're a Registered Partner in Anthropic's Claude Partner Network, and engagements can pair with FORGE, our AI-assisted development methodology, when the goal is to ship faster without shipping sloppier.
- Range of work. Web application development, mobile apps, legacy modernization of Java, PHP and .NET applications, and AI deployment.
None of this is a comment on the eight companies named this week, or a reason to celebrate anyone's difficulty. We've argued before that India's advantage isn't cost, it's discipline, and that's the case we'd make to any American buyer now: keep hiring Americans for the roles that belong in America, and give the rest of your roadmap to a team that is certified, named, embedded, and measured on what ships.
Reworking your 2027 delivery plan after this week's news? Tell us which part of your roadmap you'd move offshore first, and we'll come back with a suggested team shape. Or see how our engagements are priced before you talk to anyone.
Prefer email? Write to sales@data.in.
Frequently asked
The US Department of Labor suspended eight companies, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, Capgemini, Microsoft and Adobe, from the Permanent Labor Certification (PERM) program, citing active federal investigations. As reported, it will not accept new or process pending PERM applications involving those employers. No end date was announced.
As reported, no. The suspension stops new and pending labor certifications for the named employers, which can delay green-card sponsorship, but it does not by itself cancel existing H-1B status or previously approved PERM certifications and I-140 petitions. Anyone affected should get advice from immigration counsel.
For work that doesn't need to be physically in the US, yes. Product development, testing, legacy modernization, data and AI pipelines, and ongoing support can be delivered by a dedicated team in India working inside the US company's own repositories and sprint, without anyone needing a US visa. Roles that must be onsite are still best filled by hiring in the US.
An offshore development center is a dedicated team of named engineers in India that works only on one client's product, using that client's tools and process, while the partner company handles hiring, payroll, facilities, security and compliance. The client does not need its own Indian entity, and the team can later be transferred to the client under a build-operate-transfer arrangement.
By assigning intellectual property in all code and deliverables to the client in the contract, keeping the code in the client's own repositories from the first commit, and choosing a partner with independently audited security controls such as ISO 27001, plus ISO 27701 where personal data is involved.
India is nine and a half to thirteen and a half hours ahead of the continental US, depending on the coast and the season. A US East Coast morning overlaps with the Indian evening, so teams usually agree a fixed daily overlap window and let the rest of the work continue while the US team is offline.
It varies by seniority and vendor. Data publishes its rates: Forward Deployed Engineers are listed at INR 150,000 to 300,000 per engineer per month, roughly $1,550 to $3,150 at the indicative exchange rate on its rate card. Data invoices in INR by default and can invoice in USD on request.
- TechCrunch, 8 October 2026: US bars Microsoft, Adobe and major IT firms from green card program
- VisaVerge: PERM suspension, eight tech firms face green card halt
- India TV News, 8 October 2026: eight IT firms suspended from US green card programme
- Yale OISS, 23 September 2026: proclamation extends the H-1B $100,000 fee policy; fee remains blocked by court order
- Forrester: the long-term impact of the $100,000 H-1B fee
- GovTrack: S. 2976, HIRE Act, status and history
- BDO: HIRE Act would impose excise tax on outsourcing payments