India calls Vance’s ‘indentured servants’ remark deeply offensive

NEW DELHI/WASHINGTON — A deepening flashpoint has erupted between New Delhi and Washington following sweeping US labor restrictions targeting major technology companies and high-skilled foreign workers. India’s Ministry of External Affairs (MEA) has issued a stinging rebuke against US Vice President JD Vance, condemning his characterization of foreign tech employees as “indentured servants” as a deeply offensive invocation of painful historical and colonial tropes.

The diplomatic fallout follows an aggressive policy maneuver led by the White House and executed by the Department of Labor, which has indefinitely suspended eight multinational corporations from the Permanent Labor Certification Program (PERM)—the vital gateway through which employers sponsor foreign nationals for US green cards.

While the sudden regulatory blockade has thrown long-term residency plans into uncertainty for thousands of tech workers, it has simultaneously triggered a counter-intuitive market rally on Indian stock exchanges and prompted swift pushback from legal experts and industry bodies.

1. Main Facts: The US Policy Crackdown and India’s Rebuke

The core of the dispute centers on an announcement made by US Vice President JD Vance on Thursday, confirming that the Department of Labor has suspended eight prominent global technology firms from the PERM system. The affected companies are tech giants Microsoft and Adobe, alongside major global IT consultancy and service providers Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies, and French multinational Capgemini.

According to the administration, the suspension was levied because these firms allegedly bypassed or laid off domestic American workers in favor of lower-paid foreign professionals. In defending the policy, Vice President Vance deployed incendiary rhetoric, labeling the pipeline of tech workers as “indentured servants.”

The remark drew an immediate and severe reaction from the Indian government. During a biweekly media briefing in New Delhi on Friday, MEA Official Spokesperson Randhir Jaiswal formally addressed the statement, reading an official ministry condemnation.

“Resorting to terminology that carries painful historical and colonial legacy connotations is deeply offensive,” Jaiswal told reporters.

Jaiswal underscored that such rhetoric is entirely unwarranted and fundamentally ignores the reality that Indian professionals working in the United States are highly educated, elite specialists who serve as vital economic contributors to the American innovation ecosystem. The MEA further noted that these punitive measures run counter to the shared economic ambitions and collaborative spirit of both nations.

2. Chronology of Events: From Rule Proposals to PERM Suspension

To understand the current crisis, one must trace the rapid acceleration of immigration-related friction and regulatory tightening implemented by Washington over recent months:

• August: The Department of Justice and other federal regulators intensified scrutiny over tech hiring practices. Notably, artificial intelligence pioneer OpenAI agreed to a $3.2 million settlement with the US government to resolve allegations regarding how it advertised PERM-dependent jobs, setting a contentious precedent for the industry.
• Late Summer / Early Fall: The administration floated stringent regulatory proposals, including a staggering proposed fee of $103,265 on new H-1B visa filings, sparking immense anxiety across Silicon Valley and international outsourcing hubs.
• Thursday: US Vice President JD Vance and Labor Secretary Keith Sonderling officially announced the suspension of Microsoft, Adobe, and six major IT service providers from the PERM green card program. Microsoft shares dipped approximately 1% in response, while Adobe saw an unexpected 4% lift.
• Friday: India’s Ministry of External Affairs held its press briefing in New Delhi, issuing its sharp condemnation of Vance’s “indentured servant” phrasing. Simultaneously, Indian IT equities on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) shrugged off geopolitical fears, rallying aggressively by late morning.

3. Supporting Data: The Scale of PERM Usage and Market Impact

Data from the US Department of Labor and independent tech industry analysts paint a vivid picture of reliance on the PERM system and the precise contours of the workforce exposed to these new rules.

The PERM Landscape

The PERM process is the mandatory first step for employers seeking to sponsor temporary visa holders—primarily those on H-1B visas—for permanent residency (green cards).

• Overall Volume: In fiscal year 2025 alone, the Department of Labor certified nearly 140,000 PERM applications across all US employers. Approximately 30% of these certifications were concentrated in critical technical roles: software developers, computer systems analysts, and data scientists.
• Microsoft’s Footprint: A comprehensive analysis by GeekWire of Labor Department data reveals that Microsoft is by far the largest user of the PERM program among major product companies. The federal agency ruled on 3,161 Microsoft PERM applications in the fiscal year ending September 2025—vastly outstripping peers like Amazon (39 applications) and Google (just 3).
• IT Services Adaptation: Industry body Nasscom noted that Indian IT conglomerates operating in the US have steadily reduced their reliance on traditional H-1B visas over the years, with a relatively minor percentage of their total workforce utilizing the PERM pathway for permanent residency compared to native product firms.

Financial and Market Rebound

Despite initial fears of a structural shock to the outsourcing and tech sectors, financial markets registered a surprising resilience.

• On Thursday, US tech stocks experienced mixed reactions: Microsoft shares fell 1%, while Adobe shares rose nearly 4%.
• On Friday in Mumbai, Indian IT stocks decoupled entirely from the diplomatic spat, rallying strongly in late-morning trade. According to market trackers like IIFL, TCS shares surged up to 5.5% (bolstered by positive quarterly earnings reports released the prior day), Wipro climbed 3.2%, HCL gained 2.9%, and Infosys rose 2.7%.

4. Official Responses: Navigating the Legal and Diplomatic Divide

The policy’s technical boundaries have prompted extensive clarification from both foreign governments and legal professionals navigating US immigration code.

The Distinction Between H-1B and PERM

The MEA was careful to draw a clear legal line between the H-1B visa program and the PERM green card process. According to Indian officials:

• The current suspension does not directly invalidate existing H-1B visas.
• The residency status of current visa holders and their families remains legally secure in the short term.
• However, the freeze directly obstructs the green card sponsorship pipeline, potentially trapping employees who rely on pending PERM applications to extend their stay beyond statutory limits.

Labor Secretary Keith Sonderling confirmed that the Department of Labor will neither accept new PERM applications involving the eight blacklisted companies nor process those currently pending. Vance added that the ban would remain in effect “as long as it needs to.”

Legal Challenges on the Horizon

Immigration attorneys across the United States are already preparing to challenge the legality of the administration’s actions.

Speaking to Business Insider, attorney Ted Chiappari of Duane Morris noted that federal law generally limits the Labor Department’s authority to unilaterally suspend an employer for more than 180 days without a formal, substantiated investigation, after which a bar can stretch up to three years.

Kripa Upadhyay, an immigration lawyer at Seattle-based firm Buchalter, confirmed she expects coordinated lawsuits challenging the PERM suspensions to be filed in federal court as early as next week.

For individual workers, the exposure varies by visa timeline. Loren Locke, an immigration attorney in Atlanta, observed that the workers most vulnerable are those approaching the six-year statutory limit of their H-1B visas without an approved PERM application to bridge their extension. “Most people will either be able to wait it out or have time to switch jobs,” Locke noted, signaling that talent mobility remains a viable escape hatch for some.

5. Implications: What This Means for Global Tech and US-India Relations

The standoff over the PERM program highlights a broader ideological conflict within the United States regarding domestic labor protectionism versus globalized high-tech integration.

For High-Skilled Foreign Workers

The suspension creates immediate personal uncertainty. Tech professionals, particularly Indian nationals who make up the vast majority of employment-based green card applicants, face prolonged backlogs and existential career decisions. Those nearing their six-year H-1B caps may be forced to seek alternative employment with non-suspended firms, relocate to international offices (such as in Canada, Europe, or India), or lobby for judicial intervention.

For American Tech Giants and Service Providers

While product giants like Microsoft face severe workflow bottlenecks in retaining top-tier global engineering talent, IT service heavyweights like TCS, Infosys, Wipro, and Cognizant appear buffered by their ongoing pivot toward local US hiring and reduced structural dependence on green card sponsorships. Nonetheless, the chilling effect of hostile rhetoric from top administration officials complicates talent acquisition pipelines across the board.

For Bilateral Diplomacy

India’s sharp public rebuke demonstrates that New Delhi is increasingly willing to call out rhetoric it perceives as demeaning or historically insensitive. As economic interdependence between the US and India deepens—particularly in critical technologies, semiconductors, and defense—the management of human capital and professional mobility will remain a definitive litmus test for bilateral relations.

As legal challenges loom and diplomatic channels process the fallout, the future of the US green card architecture for elite international talent hangs in a delicate balance.