Infosys and Wipro American Depositary Receipts (ADRs) fell in US trading on Thursday after the US Labour Department suspended PERM processing for several major IT companies, including Cognizant, Infosys, Tata, Wipro, HCL and Capgemini. Wipro ADRs fell 2.4% to $1.63 as of 10:46 a.m., while Infosys ADRs declined 3.13% to $10.14. Cognizant Technology Solutions shares also fell 3.08% to $54.70.
The US Department of Labour said it was suspending the companies from the Permanent Labour Certification Programme, or PERM, amid investigations and allegations of fraud. US Labour Secretary Keith Sonderling said the department was suspending some of the world's largest IT outsourcing companies from the programme.
Microsoft and Adobe have also been suspended from PERM processing, with the Labour Department citing multiple active federal investigations in their cases.
PERM is a key part of the US employment-based immigration process. It allows US employers to seek labour certification for eligible foreign workers as part of the process of sponsoring them for permanent residency, or green cards.
The latest action applies to new PERM processing and does not invalidate existing approvals. It also does not directly suspend the H-1B visa programme, which is a separate route used by technology companies to employ skilled foreign workers in the US.
READ | US Stock Market Today: Dow, S&P 500, Nasdaq In Red As Oil, Treasury Yields Jump
However, the move could have implications for Indian IT companies if the suspension remains in place for an extended period. A prolonged halt in PERM processing could affect the permanent residency pipeline for employees and increase uncertainty around long-term workforce planning in the US.
The development comes amid a wider US crackdown on immigration and alleged visa fraud, putting greater scrutiny on how companies hire and deploy foreign workers.
For Indian IT companies, the US is their largest market and the sector has historically relied on a combination of local hiring, offshore delivery and overseas deployment of skilled employees. Tighter immigration scrutiny could therefore increase compliance requirements and potentially raise costs for companies with large US operations.
The market reaction was not limited to Indian IT stocks. Intel and Marvell Technology shares were each down more than 4%, while the Nasdaq fell 0.47% to 27,409.78 at the time of reporting.
Investors will now watch whether the PERM suspension remains temporary or develops into a longer-term restriction. The duration of the action could be critical for Indian IT companies, particularly if delays in green-card processing begin to affect employee retention, hiring plans and the movement of skilled workers.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.