Long before the Donald Trump administration suspended several Indian IT companies from a key US green-card programme, these firms had begun reducing their dependence on American work visas, increasingly hiring locally and building delivery centres in countries closer to their biggest overseas market.For years, Indian IT services majors followed a relatively simple business model — executing routine work for overseas clients from India while sending experienced engineers to client offices for more complex projects and to build relationships. However, as the US tightened regulations around H-1B visas, and Indian IT companies expanded their global operations, they began shifting more work offshore while stepping up local hiring in markets such as the US and Europe.The shift has helped shield these companies from the immediate business impact of the US Department of Labor’s decision on Thursday to suspend eight major technology firms, including TCS, Infosys, Wipro, HCLTech and Cognizant, from the Permanent Labour Certification Programme (PERM), a key step in obtaining employment-based green cards for foreign workers.Vice President JD Vance announces the suspension of the PERM Program for Microsoft:“Thanks to an ongoing investigation, we have decided to suspend the PERM program for Microsoft, which means they will no longer be able to take those H-1Bs and apply for permanent resident status within the United States of America. Now our message to Microsoft and to any other foreign or domestic corporation is quite simple. We obviously want you to thrive in the United States of America. We want people to invest in the United States of America, particularly the American technology sector. We’re the biggest boosters of your industry. We want you to continue to grow and to employ a lot of people, but we want you to employ American workers. And so our message to Microsoft is, you’re great American company, but you’ve got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants.”— Vice President JD Vance (@VP) October 8, 2026The groundwork for this transition had been laid over several years. Improvements in subsea cable connectivity in the early 2000s and the rise of cloud computing in the following decade reduced communication and data-transfer costs, making it easier to deliver technology services remotely. The Covid-19 pandemic further accelerated acceptance of offshore work among clients.The Trump administration’s decision in September 2025 to introduce a $100,000 fee for certain new H-1B petitions became another trigger for companies to reduce their dependence on sending employees to the US. The fee was subsequently blocked by US courts, though the administration has proposed a new, separate cap-subject fee of $103,265.How Indian IT companies changed their hiring trendHistorically, Indian IT companies maintained a 70:30 offshore-to-onshore employee ratio. Following the announcement of the H-1B fee hike, an analysis by Kotak Neo projected that this could shift to 85:15 by FY27, with nearshoring gaining traction in Canada, Mexico and Latin America. It also expected US-based hiring to increase 12-18% between FY26 and FY27.Industry estimates suggest that around a fifth of the workforce at major Indian IT companies works onshore, with only a small proportion dependent on H-1B visas.Also Read | India reacts to US move on IT firms, says J D Vance’s remark ‘deeply offensive’“We’ve seen our IT companies investing heavily in creating hubs in Latin America, Europe, and Asia-Pacific in order to be nimble without the regulatory hurdles. This has especially picked up over the past 2-3 financial years, in what is called a ‘hybrid’ global delivery model,” an analyst tracking the sector at a domestic brokerage said. “So, I am not very concerned by it (the US’ actions). The groundwork to protect against this started a while back.”Story continues below this adCompany disclosures provide evidence of this shift. Let’s look at the situation with some major companiesHCLTech: In its FY26 annual report, HCLTech said approximately 80% of its US workforce comprised local hires, reducing its dependence on visas.Its FY25 sustainability report showed that its global operations had expanded to 20 locations across the Americas, Europe and other markets. The workforce at these locations increased from 24,797 in FY24 to 26,083 in FY25, while local hiring rose 47% to 7,731 employees during the year.Tech Mahindra: Similarly, Tech Mahindra chief executive Mohit Joshi said during an earnings call in October 2025 that fewer than 1% of the company’s global workforce was on H-1B visas, while its visa dependence in the US was below 30%. The company was strengthening its operations in Canada, Mexico and Brazil to deliver work for clients from locations outside the US.Story continues below this adTata Consultancy Services: TCS, India’s largest IT services company, opened an AI-driven operations centre in Mexico in August 2025, its eighth in the country. It said it had built a workforce of more than 11,000 employees in Mexico over the previous 22 years.The company’s management has consistently emphasised the importance of hubs in Latin American countries such as Mexico, Brazil and Colombia, which act as “time-zone bridges” for US clients.Also Read | What is PERM, why does it matter for Indian workers?During its July-September FY26 earnings call, TCS chief human resources officer Sudeep Kunnumal said: “We have significantly localised our workforce in the US…we believe our business model will be able to adapt quickly to any changes in immigration policy.”Story continues below this adFollowing the latest PERM suspension, TCS reiterated that its limited use of the programme would insulate its operations. “Our PERM applications were in single digits in the last two years and hence we do not expect the suspension of the program to impact our workforce strategy and customer engagements,” the company said on Friday. It also reiterated plans to hire 15,000 people in the US over the next five years..@Sonderling47: “I am hereby suspending from the Permanent Labor Certification Program some of the largest IT outsourcing firms in the world — Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini — and also, due to multiple active federal investigations, @USDOL is suspending Microsoft and Adobe from the program.”— Rapid Response 47 (@RapidResponse47) October 8, 2026The limited exposure is reflected across the industry. According to an ICICI Securities analysis, Indian IT firms accounted for less than 2% of PERM applications filed in the US between October 2024 and September 2025.Wipro: Wipro has also undertaken similar steps to reduce its dependence on US immigration policies.“More than 80% of people are localised and we are looking at 250-odd H-1Bs in the past five years. So, we have been progressively reducing our dependence on H-1Bs,” the company’s human resources head Saurabh Govil said during its post-Q2 FY26 earnings call.The company has also expanded its delivery capabilities across the Americas, Europe and Asia-Pacific. Infosys, HCLTech and Tech Mahindra have adopted similar strategies, combining local recruitment with offshore and nearshore delivery centres.Story continues below this adAlso Read | US again eyes $100k H-1B fee: How Indian workers, IT firms will be hitThe market reaction to the PERM suspension reflected expectations of a limited immediate impact on operations. Indian IT stocks rose on Friday, with the Nifty IT index gaining around 3%. TCS shares rose about 5.5%, also supported by its September-quarter earnings, while Infosys, Wipro and HCLTech gained around 3%.However, analysts have warned that prolonged uncertainty over permanent residency could make it harder for these companies to retain experienced foreign workers in the US, even if the immediate impact on project delivery remains limited.Drop in H-1B approvalsThe changing employment model is also visible in the sharp decline in new H-1B approvals for Indian IT companies over the past decade.According to an analysis of US Citizenship and Immigration Services (USCIS) data by the National Foundation for American Policy (NFAP), the seven largest India-based IT companies received just 4,573 H-1B petition approvals for initial employment in FY25 — a decline of 70% from FY15 and 37% from FY24.Story continues below this adOnly three Indian companies figured among the 25 largest recipients of new H-1B approvals in FY25. US technology companies Amazon, Meta, Microsoft and Google occupied the top four positions, marking a shift from the period when Indian IT services providers were among the biggest users of the programme.While IT companies do not typically disclose a detailed breakdown of their overseas workforce by immigration status, the decline in new H-1B approvals points to their reduced reliance on bringing employees from India to work at client locations in the US.Companies such as Wipro, LTIMindtree, HCLTech and Tech Mahindra have progressively expanded local recruitment and offshore delivery capabilities, while US multinational companies have increasingly established global capability centres (GCCs) in India to directly employ skilled technology workers.The latest PERM suspension nevertheless creates fresh uncertainty for employees seeking permanent residency in the US, particularly those whose applications have not yet been completed.