Trump’s green card rule pushed Indian H-1B holders into uncertainty; USCIS walks back after business pushback: Report

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Trump's green card rule pushed Indian H-1B holders into uncertainty; USCIS walks back after business pushback: Report

Industry groups, including the US Chamber of Commerce and companies in the tech sector, said the proposal could disrupt hiring and ongoing work.

5 min readJun 6, 2026 09:32 PM IST

First published on: Jun 6, 2026 at 06:58 PM IST

A proposal by the Trump administration asking most green card applicants to apply from their home countries led to concern among US business leaders. (AI-generated image)

The Trump administration’s May 21 proposal requiring most green card applicants, including the estimated one million Indians currently in the EB backlog and the Indian H-1B-to-green-card pipeline that has dominated Indian-American immigration for five decades, to apply from their home countries appears to have been partially walked back following intense backchannel pushback from US business groups including the US Chamber of Commerce and major tech companies, The Washington Post reported.

US Citizenship and Immigration Services (USCIS) initially said applicants for permanent residency should apply from outside the United States “except in extraordinary circumstances”, triggering widespread uncertainty among foreign workers, but later told reporters that many applicants may not need to leave the country, though no formal walk-back has been announced.

Officers are directed to consider all relevant factors and information on a case-by-case basis when determining whether an alien warrants this extraordinary form of relief, the USCIS said.

The rule, if applied strictly, would have ended a half-century practice under which foreign workers in the US, including Indian H-1B holders who account for roughly 70 per cent of US H-1B visa issuance, could apply for permanent residency from within the country via Form I-485 (Adjustment of Status).

The alternative — Form DS-260 Consular Processing through US embassies abroad — has been paused for nationals of 75 countries by the State Department, and suspended for nationals of 19 “countries of concern” by USCIS following the November 2025 Washington DC shooting of two National Guard members by an Afghan national.

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Indian immigration lawyers warn that returning home to apply could also trigger 3-year or 10-year re-entry bars for applicants with periods of out-of-status residence, effectively trapping them outside the US for years.

Following the announcement, business groups, industry leaders and CEOs held discussions with officials from the White House and departments including Homeland Security, Labour and State, the report said.

The memo The pushback India impact I-485 vs DS-260 The country bans What happens next

THE POLICY

USCIS memo PM-602-0199, issued May 21, 2026

The memo recasts Adjustment of Status — the route to a green card from inside the US, under Section 245 of the immigration law — as a matter of discretion and "administrative grace", not an entitlement. It tells officers to apply heightened, case-by-case scrutiny. It does not change the statute, scrap any green-card category, or by its own text bar adjustment outright.

THE PRESS RELEASE SAID

Apply from home

Temporary visa holders who want a green card must return to their home country, except in extraordinary cases.

THE MEMO ACTUALLY SAYS

Case-by-case

Officers must weigh each application on discretion. Nowhere does it order consular processing as a blanket rule.

"...must return to their home country to apply, except in extraordinary circumstances."

— USCIS spokesman Zach Kahler, press briefing, May 22, 2026

CONFUSION IN A DAY

A press release, then an immediate walkback

Within hours of the public announcement, business groups and immigration lawyers pushed back hard. The agency softened its message, and federal officials later stressed the memo was a reminder of existing discretion — not a new blanket rule.

1

Morning: the hard line

USCIS told reporters temporary visa holders must apply for green cards from their home countries, save extraordinary cases.

2

Afternoon: the walkback

After business and legal pushback the same day, the agency clarified the policy was still being operationalised.

3

Days later: DHS softens it

DHS said the memo was not a blanket change but a reminder that officers already have case-by-case discretion.

⚖

The legal flashpoint

Attorneys warn the move collides with AC21, the law letting backlogged workers change jobs once an I-485 has been pending 180 days — a right that needs a filed I-485. Congress created adjustment of status in 1952 and never wrote in an "extraordinary relief" standard.

1.1M+

Indians in employment green-card queues (incl. dependents)

~58%

Of FY2024 US green cards came via adjustment of status

30k+

Indian H-1B workers turn green-card-eligible each year

WHY IT LANDS ON INDIANS

Dual intent helps — but it isn't a shield

H-1B and L-1 holders are structurally safer because the law lets them pursue a green card while working. But the memo says holding valid status is only a positive factor, not decisive. With per-country caps stretching Indian waits past a decade and consular slots in India running over a year, being told to "go home and apply" carries real cost. The memo does not change anyone's right to live and work in the US while a case is pending.

TWO ROUTES, ONE GREEN CARD

Once your immigrant petition is approved

There are two ways to finish the green-card process. The memo nudges more people from the first route toward the second — and that switch is where the risk lives.

FORM I-485

Adjust inside the US

Stay in the country, keep working, finish the process here. The memo makes this discretionary, not automatic.

FORM DS-260

Process abroad

Return to a US consulate in your home country for the final visa — the step the memo's framing pushes people toward.

THE HIDDEN TRAP

Leaving can trigger a re-entry bar

Anyone who built up "unlawful presence" in the US can trigger a three-year or ten-year bar on re-entry the moment they leave to consular-process abroad. That makes the I-601A unlawful-presence waiver more important than ever — and is why attorneys caution against rushing to leave.

CLEARING THE CONFUSION

India is on none of the three country lists

Three separate Trump-era actions are often lumped together — and Indian readers are not named in any of them. Here is what each one is, and where India stands.

◆

39-country travel ban

Proclamation signed Dec 16, 2025, in force Jan 1, 2026; expanded an earlier 19-country list. India: not listed.

◆

75-country immigrant-visa freeze

From Jan 21, 2026, pauses only consular green-card issuance pending a public-charge review. Includes Pakistan, Bangladesh, Nepal, Bhutan. India: not listed.

◆

19 "countries of concern" pause

A Dec 2025 USCIS re-review of green cards after the DC National Guard shooting. India: not listed.

A POSSIBLE UPSIDE

The freeze could free up green cards

Because the 75-country freeze leaves family-based visas unused, analysts estimate roughly 50,000 could roll over into employment-based categories — the queues where Indians dominate. A similar pandemic-era rollover once sped up priority dates for India.

MAY 21, 2026

USCIS issues memo PM-602-0199, recasting adjustment of status as discretionary relief.

MAY 22, 2026 — SAME DAY

Press release, then walkback. The "apply from home" line draws instant business and legal pushback; the agency softens its tone hours later.

MAY 29, 2026

DHS clarifies the memo is a reminder of existing discretion, not a blanket new requirement to leave the US.

NOW — EARLY JUNE 2026

Still unresolved. USCIS has not said whether the memo hits already-filed I-485s or only new ones. Litigation is widely expected; the separate 75-country freeze is already in court.

WHAT LAWYERS ADVISE

Don't panic, don't rush to leave

Attorneys are telling clients not to withdraw a properly filed I-485 on the strength of the memo alone, and not to rush abroad to consular-process, given the re-entry-bar risk. The priority for employment-based applicants: keep underlying H-1B or L-1 status valid as a safety net.

Sources: USCIS memo PM-602-0199 · DHS statements · CNN · Al Jazeera · TIME · Reuters · American Immigration Council · Business Standard · The Quint · immigration attorney advisories (Wolfsdorf, Hinshaw, Morgan Lewis)

Why did businesses raise concerns?

Industry groups, including the US Chamber of Commerce and companies in the tech sector, said the proposal could disrupt hiring and ongoing work.

They warned privately that forcing applicants to leave the US during the process would “harm” their workforce. Businesses that rely on skilled foreign workers said such a step could affect operations and create uncertainty for employees already in the country.

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The report added that these concerns were conveyed through calls, emails and backchannel discussions with officials.

Has the policy been clarified or changed?

After the pushback, the administration indicated that most work visa holders would not be affected. USCIS later told reporters that many applicants may not need to leave the country, though no formal announcement has been made.

A White House official told The Washington Post that the guidance reflects existing law and that decisions would be taken case by case. This means some applicants may be allowed to apply from within the US, while others may still be required to leave.

Immigration lawyers told the newspaper that the policy is effectively on hold until clearer instructions are issued.

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Why it matters to Indians

Approximately 1 million Indians are currently in the green card backlog, according to the Cato Institute and USCIS data.

The backlog for EB-2 and EB-3 Indian applicants can exceed 70-80 years at current processing rates.

Indian H-1B holders typically file an Adjustment of Status (Form I-485) while remaining in the US — this is the process the new rule restricts.

Forcing Indian applicants to return to India to apply via Form DS-260 would break a 50+ year practice for Indian tech and healthcare professionals.

The Department of State’s consular processing for India has historically been one of the most backlogged.

What happens next for applicants?

There are signs that the rules may not be applied strictly in all cases. Neil Bradley of the US Chamber of Commerce said the group had heard that some recent applicants were not being asked to leave.

“This is welcome news, and we encourage the administration to provide greater clarity,” he said.

USCIS spokesperson Zach Kahler said the approach could reduce the number of people who stay in the US after being denied residency. He said it would also allow the agency to focus on other priorities, including humanitarian cases and citizenship applications.

“We’re returning to the original intent of the law to ensure aliens navigate our nation’s immigration system properly… This policy allows our immigration system to function as the law intended instead of incentivizing loopholes,” the USCIS said.

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For now, with no detailed rollout and mixed signals from officials, many applicants remain unsure about how the process will be implemented.

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