The Ministry of External Affairs issued a strongly worded statement on Friday, October 9, 2026, denouncing U.S. Vice President J.D. Vance’s characterization of foreign laborers, including Indian information‑technology specialists, as “indentured servants.” The ministry described the comment as both unwarranted and deeply offensive, invoking the painful legacy of 19th‑century indentured labour used by colonial powers.
US Suspension of PERM Certifications
On the preceding Thursday, Vice President Vance, together with U.S. Labor Secretary Keith Sonderling, announced the suspension of the Permanent Labour Certification (PERM) program for eight major outsourcing firms. The move targets five Indian multinationals—Infosys, Tata Consultancy Services, Wipro, Cognizant and HCL—commonly referred to as the “Big 5,” as well as three non‑Indian companies, Capgemini, Microsoft and Adobe. The U.S. administration accused the eight firms of engaging in visa fraud and of exploiting a “pernicious system” that allegedly undercuts American workers by importing large numbers of foreign employees at lower wages.
According to the U.S. government, the PERM process has facilitated more than 230,000 H‑1B visa approvals and 100,000 permanent‑residency grants since 2009. The administration further noted that roughly 70 % of all H‑1B holders are Indian nationals, underscoring the centrality of Indian talent to the U.S. tech sector. Vance’s remarks emphasized that the companies “bring in indentured servants,” lay off American workers, and profit by “undercutting wages.”
The PERM program requires employers to demonstrate that they have made a genuine effort to hire qualified U.S. citizens before seeking certification for foreign workers. The suspension therefore blocks the eight companies from certifying essential‑skill employees for green‑card sponsorship, potentially affecting thousands of existing and prospective workers.
India’s Response and Economic Implications
India’s external affairs ministry countered the U.S. narrative by highlighting the high education levels and skill sets of Indian professionals contributing to the American economy and innovation ecosystem. The statement reminded the United States that its own development has been shaped by successive waves of immigrants. It also stressed that talent mobility creates mutual benefits: it offers Indian engineers and technologists career opportunities while supplying U.S. firms with cutting‑edge expertise, research capacity, productivity gains, competitiveness, job creation, and shareholder wealth.
The ministry warned that the suspension of labour certifications does not advance the “shared ambitions of both countries,” hinting at broader economic ramifications. The decision arrives at a time when bilateral trade talks have already stalled. Negotiations for a comprehensive free‑trade agreement between New Delhi and Washington have hit a plateau, despite months of dialogue in both capitals and direct calls between Prime Minister Narendra Modi and President Donald Trump.
Finance Minister Nirmala Sitharaman confirmed that the trade talks have made little progress, echoing remarks from U.S. Trade Representative Jamieson Greer, who said no free‑trade deal is imminent. The ministry also noted that India is awaiting the outcome of the Sanctions Against Russia and Iran Act, which could impose up to 100 % U.S. tariffs on nations importing substantial volumes of Russian oil. President Trump is slated to decide on those tariffs on October 18, a decision that could further influence the already tense economic relationship ahead of the U.S. mid‑term elections.
Broader Trade Tensions
The suspension of PERM certifications adds a new layer to the existing strain over trade policy. While the United States points to alleged abuses of the visa system, Indian officials argue that the move disregards the contributions of Indian talent and risks damaging a key pillar of the bilateral economic partnership. The ministry’s statement invoked historical context, noting that the term “indentured servants” carries colonial connotations that are offensive to many, especially given the United States’ own history of using such labour in the 19th century.
Analysts suggest that the PERM suspension could have ripple effects across the technology sector, potentially disrupting project timelines for U.S. companies that rely on Indian expertise. It may also influence the migration decisions of Indian professionals who have traditionally viewed the United States as a premier destination for career advancement.
Both governments appear poised to navigate a delicate diplomatic path. While the United States emphasizes enforcement of immigration rules and protection of domestic workers, India underscores the economic interdependence fostered by skilled migration. The outcome of upcoming tariff decisions and the stalled free‑trade talks will likely shape the trajectory of this dispute, with implications for the broader Indo‑U.S. economic relationship.
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