US Suspends Green Card Application Eligibility for Indian IT Giants; India Slams Vance's "Indentured Servants" Language as "Extremely Offensive"

US Labor Secretary Keith Sonderling announced on Thursday that multiple major IT outsourcing companies including Cognizant, Infosys, Tata, Wipro, HCL and Capgemini had been suspended from the Permanent Labor Certification (PERM) program. According to Deutsche Welle, Sonderling said in a statement that the suspension stemmed from federal investigations into these companies, involving allegations of so-called "abuse" of the program. According to reports, eight tech companies including Microsoft have been shut out of the program this time.

The Permanent Labor Certification program allows US employers to apply for permanent residency (i.e., "green cards") on behalf of foreign employees holding H-1B work visas. In fiscal year 2025, Indian applicants received nearly 70% of approved H-1B visas, so the suspension decision impacts India's IT industry most directly. According to Deutsche Welle, Indian media cited analysis from New Delhi-based think tank Global Trade Research Initiative (GTRI) pointing out that this is a "wake-up call" for India's IT industry over broader foreign labor restrictions, recommending that companies diversify overseas markets, strengthen domestic delivery, expand US local recruitment, and invest more resources in the field of artificial intelligence in order to reduce their high vulnerability to sudden US policy shifts.

India's Ministry of External Affairs issued a statement on Friday in response, saying the US side's relevant steps "do not advance the shared vision of New Delhi and Washington," and emphasizing that talent mobility has "enormous mutual benefit" for both countries. The statement also explicitly drew a line between the PERM suspension and the H-1B visa program, saying the suspension "itself does not affect the validity of existing H-1B visas, nor does it affect the status of H-1B visa holders and their families," but acknowledged that it could affect "the permanent residence/green card application procedures for eligible employees of affected companies."

Adding further tension, India's Ministry of External Affairs issued a rare direct rebuke of remarks made by US Vice President JD Vance on Thursday. Vance called H-1B visa holders "indentured servants" — a term touching on the sensitive historical vocabulary of the British Empire's colonial-era plundering of indentured laborers from the Indian subcontinent.

"The use of language with a painful history and colonial connotations is extremely offensive," India's MEA statement read. The statement further pointed out that these "inappropriate" descriptions "ignore the fact that Indian professionals in the United States, as highly educated, highly skilled talent, contribute to its economy and innovation ecosystem."

How many Indian IT practitioners have their permanent residency status specifically affected by the suspension remains unclear; the specific allegations and timeline of the "federal investigation" claimed by the US side have not been made public; and whether the move will evolve into a broader tightening of H-1B policy is also uncertain.