On October 9, 2026, the Nifty IT index surged more than 3%, showing strong investor confidence despite the US government's suspension of eight major IT firms from its green card programme. This rally was supported by Tata Consultancy Services (TCS) posting solid quarterly earnings and the market's view that the suspension would not affect Indian IT companies significantly.
- The Nifty IT index rose 3.3% to 28,670.25 points on October 9.
- US suspended eight firms including TCS, Infosys, Wipro, and HCL Tech from the PERM green card programme.
- TCS reported 15% year-on-year net profit growth in Q2 FY27.
- TCS's revenue increased 11.2% to ₹73,188 crore in the quarter.
- TCS plans to hire 15,000 employees in the US over the next five years.
What caused the US to suspend eight IT firms from the green card programme?
On October 8, 2026, US Labour Secretary Keith Sonderling announced the suspension of eight major technology and IT outsourcing companies from the Permanent Labour Certification Programme (PERM). This programme is a key step for foreign workers seeking green cards in the United States. The suspension is part of a broader effort by the US government to combat fraud and protect American jobs.
The suspended companies include Adobe, Microsoft, Infosys, TCS, Wipro, HCL Tech, Cognizant, and Capgemini. The US government stated that it will not accept new or process pending PERM applications involving these firms during the suspension.
How did Indian IT companies respond to the suspension?
TCS issued an official statement assuring compliance with any directives from the US Department of Labor. The company emphasized its workforce strategy in the US focuses on hiring local talent, supported by a strong campus recruitment model.
TCS operates 31 offices and delivery centers across the United States and plans to hire 15,000 people in the US over the next five years. The company noted that its PERM applications have been in single digits over the past two years, so it does not expect the suspension to impact its workforce strategy or customer engagements.
Why did the Nifty IT index rally despite the suspension news?
Investors reacted positively to TCS's Q2 earnings report released after market hours on October 8. TCS posted a 15% year-on-year increase in consolidated net profit to ₹13,884 crore, supported by revenue growth and new deals.
The company's revenue from core operations rose 11.2% to ₹73,188 crore compared to the previous year. Additionally, TCS's total contract value surged to $9.6 million, with AI-related revenues reaching $3.1 billion, accounting for over 10% of total revenues in the quarter.
Strategic deals with Porsche AG and Best Buy highlighted strong demand momentum in the IT sector, which helped lift investor sentiment and contributed to the Nifty IT index's rise.
What are the broader implications for the Indian IT sector?
The US is a primary market for Indian IT companies, both for clients and workforce. Despite the suspension from the green card programme, Indian IT firms like TCS, Infosys, Wipro, and HCL Tech continue to focus on expanding their local workforce and maintaining strong client relationships.
The suspension reflects the US government's efforts to tighten immigration policies and protect domestic jobs. However, Indian IT companies appear prepared to adapt their hiring strategies and continue growth, as indicated by TCS's hiring plans and robust financial performance.
Frequently Asked Questions
Q: What is the PERM programme?
A: The Permanent Labour Certification Programme (PERM) is a US government process that foreign workers must go through to obtain green cards. It certifies that hiring a foreign worker will not negatively affect US workers.
Q: Which companies were suspended from the PERM programme?
A: Eight companies were suspended: Adobe, Microsoft, Infosys, Tata Consultancy Services (TCS), Wipro, HCL Tech, Cognizant, and Capgemini.
Q: How did TCS perform in its Q2 FY27 earnings?
A: TCS reported a 15% year-on-year increase in net profit to ₹13,884 crore and an 11.2% rise in revenue to ₹73,188 crore. The company also secured major deals and expanded its AI revenue to $3.1 billion.
Q: Will the suspension affect Indian IT companies' hiring in the US?
A: TCS stated that the suspension will not impact its workforce strategy significantly, as it focuses on hiring local talent and has had few PERM applications recently. The company plans to hire 15,000 employees in the US over the next five years.
