Vice President JD Vance with Prime Minister Narendra Modi in New Delhi, April 2025. Photo: Office of the Vice President (public domain)
A green card freeze, a loaded phrase and a rare diplomatic rebuke expose how far the H-1B debate has drifted from what the law actually says.
India’s government on Friday publicly rebuked US Vice President JD Vance for describing foreign tech workers as “indentured servants,” calling the language unwarranted and “deeply offensive.” The statement from India’s Ministry of External Affairs came one day after the Labor Department suspended Microsoft, Adobe and six large IT services firms from the PERM program, the labor certification step that sits at the front of most employment-based green card cases.
The two events are tied together, and they matter for different reasons. The PERM suspension is a concrete policy action that could stall permanent residency for thousands of workers already living legally in the United States, most of them Indian nationals. The “indentured servants” phrase is rhetoric, but it struck a nerve in a country where the word indenture still describes the forced migration of more than a million laborers under British rule.
The timing raises the stakes. The midterm elections are less than four weeks away, the administration’s $100,000 H-1B fee is tied up in federal court, and Washington and New Delhi have spent much of the past year managing trade friction. This article explains what happened, what the H-1B program legally requires, where the critics have a point, where the rhetoric outruns the facts, and what comes next for workers, employers and the US-India relationship.
What happened on October 8
At a White House news conference on the administration’s fraud task force, Labor Secretary Keith Sonderling announced that the department would stop accepting new PERM applications from eight companies and would stop processing pending ones. The list: Microsoft and Adobe, both American; Capgemini, which is French; and Cognizant, Infosys, Tata Consultancy Services, Wipro and HCL Technologies, firms with Indian roots or Indian headquarters.
Vance framed the move as a response to fraud. He said Microsoft laid off about 6,000 US workers last year while securing roughly 6,300 H-1B approvals and nearly 3,000 green cards. He called the program “rife with fraud” and used the phrase “indentured servants” several times. Sonderling added that the suspended companies had received more than 230,000 H-1B visas and more than 100,000 labor certifications since 2009. No end date was given; Vance said the suspension would last as long as needed.
Microsoft pushed back on the arithmetic. The company said about 80 percent of its roughly 6,000 H-1B filings last year were extensions or status changes for people who already worked there, not new hires, and that the remainder were for people already lawfully in the country. That distinction matters. An H-1B “approval” in government data often reflects paperwork for an existing employee, not a fresh hire replacing an American.
Worth noting as well: Amazon, Google and Meta, which are among the largest H-1B users, were not on the list.
How India responded, and why the wording matters
India’s statement, dated October 9, does three things, and the order is revealing.
First, it reassures. It points out that PERM is separate from the H-1B visa and that the suspension does not, by itself, affect existing H-1B visas or the status of visa holders and their dependents. It concedes there “could be some impact” on the green card process for employees of the affected companies. That paragraph is written for the hundreds of thousands of Indian families in the US who woke up worried about their status.
Second, it argues economics. Talent mobility, the ministry says, benefits US companies through innovation, productivity, competitiveness and job creation, and it concludes that the US steps “do not advance the shared ambitions of both countries.” In diplomatic terms, that is a mild objection to the policy itself.
Third, it objects to the language, and here the tone sharpens. Without naming Vance or repeating his phrase, the ministry calls the description unwarranted, notes that the United States was built by generations of immigrants, and says that resorting to terminology with “painful historical and colonial legacy connotations is deeply offensive.”
The split is deliberate. New Delhi is treating the PERM suspension as a sovereign US decision it disagrees with, while treating the vice president’s words as a matter of national dignity. India has criticized US policy before, including calling 2025 tariffs unfair and unjustified, but it rarely addresses a sitting vice president’s remarks this directly.
What the H-1B law actually requires
Much of the H-1B argument rests on a premise that neither side checks against the statute. Vance has repeatedly described the program as meant for exceptional people. In July he said it was intended for “a brilliant technology person, or a brilliant scientist, or a brilliant doctor.” Industry defenders often make the mirror-image claim that H-1B brings in “the best and the brightest.”
The law says something more modest. The H-1B is a visa for a specialty occupation, which federal law defines as a job requiring highly specialized knowledge and at least a bachelor’s degree in a specific field, or its equivalent. The employer must also file a Labor Condition Application promising to pay at least the prevailing wage for that job in that area. Nothing in the statute requires genius, rare talent or a shortage of American workers.
Congress built separate lanes for exceptional people:
- O-1 is a temporary visa for individuals with extraordinary ability, shown by sustained national or international acclaim.
- EB-1A is a green card for extraordinary ability, and applicants can petition for themselves without an employer.
- EB-2 National Interest Waiver covers advanced-degree holders whose work benefits the country enough to skip the labor certification process.
So when politicians measure the H-1B against a “brilliant scientist” standard, they are holding it to a test Congress never wrote. A 23-year-old software developer with a computer science degree, paid the legal prevailing wage, is using the program exactly as designed.
The data bears this out. According to figures the Department of Homeland Security cited in its 2025 lottery rule, about 28 percent of cap-subject H-1B petitions filed between fiscal 2020 and 2024 were at the lowest of the Labor Department’s four wage levels, and 55 percent were at the second level. Critics read that as proof of cheap labor. Defenders note that Level I and II are legal, entry-level and early-career tiers, appropriate for recent graduates. Both readings can be true at once, which is exactly why the program is so hard to debate honestly.
Why “indentured servants” lands so hard
In American history, indentured servitude usually calls to mind colonial-era Europeans who traded several years of labor for passage across the Atlantic. In India, the phrase means something darker and much more recent.
From the 1830s until the system was shut down during World War I, British, Dutch and French colonial powers shipped more than 1.6 million Indian laborers to plantations and railway projects in places such as Mauritius, Fiji, Guyana, Trinidad, Suriname, South Africa and East Africa. Most were poor, many were illiterate, and contracts were often signed under deception or pressure. Large diaspora communities across the Caribbean, the Indian Ocean and the Pacific descend from them. For many Indians, the word indenture is close kin to bondage.
Applied to software engineers and physicians who hold university degrees and earn salaries above the legal wage floor, the label strikes many Indians as both historically careless and demeaning. Consider the people who have held the very visa Vance described. Microsoft CEO Satya Nadella, who arrived in the US as a graduate student, surrendered his green card in 1994 and went back to H-1B status so his wife could join him, a story he tells in his book Hit Refresh. Elon Musk has said he once held an H-1B, and a representative for Arista Networks CEO Jayshree Ullal confirmed to Forbes that she did too. Few people would describe any of them as servants.
The point Vance’s defenders would make
Fairness requires noting that the phrase did not originate with Vance and is not purely a slur in American policy debates. Senator Bernie Sanders, a progressive, has used the same language to argue that H-1B workers are underpaid and dependent on their employers. Some pro-immigration voices have also argued that the system can feel like modern indentured servitude. A 2025 commentary in Fortune made that case, pointing out that a worker stuck in a decades-long green card queue cannot easily change jobs without risking their place in line.
In that reading, the target is the structure that ties workers to sponsors, not the workers themselves. The difficulty is that Vance used the term to describe the people being hired, alongside a claim that many of them should not be in the country at all. That framing is what India objected to, and it is why the phrase traveled as an insult rather than a policy critique.
Where the critics have a point
Dismissing the administration’s concerns as pure politics would be a mistake. Several of the problems critics describe are real and have been documented for years, by Republicans and Democrats alike.
- Weak front-end screening. By statute, the Labor Department reviews Labor Condition Applications mainly for completeness and obvious errors, and it certifies the overwhelming majority within days. The wage promise is largely self-attested, and enforcement depends heavily on complaints or targeted investigations after the fact.
- The outsourcing model. IT services firms place H-1B workers at client sites. Critics argue this model, more than in-house hiring at product companies, is where displacement of American workers is most likely, especially when a client lays off staff and contracts the same work back. Several of the firms on the PERM list operate this way.
- Lottery gaming. Before 2024, some employers filed multiple registrations for the same person to improve the odds. USCIS moved to a beneficiary-centric lottery to curb it, which is a quiet admission that the system was being exploited.
- Worker dependence. Because H-1B status and the green card process both run through the employer, a worker who complains about pay or conditions risks their future in the country. That leverage is the real substance behind the “indentured” critique.
The administration’s July 2026 investigation into H-1B and PERM fraud, which included Labor Department subpoenas, signaled that it intends to build cases rather than rely on rhetoric alone. What remains unclear is what specific findings, if any, justify suspending these eight companies. Public accounts of the announcement cite aggregate visa and layoff numbers, not company-level evidence of PERM fraud.
That gap matters. PERM is a sworn process in which employers must test the US labor market through recruitment and certify that no qualified, willing American applied. If companies falsified those attestations, there are legal penalties for it. If they did not, a blanket suspension punishes thousands of workers whose cases were filed in good faith.
The question nobody in Washington wants to answer
If the H-1B system has been gamed for years, as officials now say, why has nobody fixed it through legislation?
The record is bipartisan and unflattering. Senators Chuck Grassley, an Iowa Republican, and Dick Durbin, an Illinois Democrat, first introduced their H-1B and L-1 Visa Reform Act in 2007. They reintroduced it on September 29, 2025, with provisions that would tighten wages, recruitment rules and third-party placements. Grassley chairs the committee that would move the bill. Republicans control the House, the Senate and the White House. The bill has not become law. Congress has not passed a significant H-1B overhaul in roughly two decades.
Instead, every recent administration has reached for executive tools:
| Year | Action | What happened |
|---|---|---|
| 2026 | DOL suspends eight companies from PERM | Announced Oct. 8; duration open-ended |
| 2026 | Federal court rules against $100,000 H-1B fee | Oct. 1 ruling found required rulemaking steps were skipped |
| 2026 | Wage-weighted H-1B lottery takes effect | Higher wage levels get up to four lottery entries |
| 2025 | Presidential proclamation sets $100,000 fee on new petitions | Challenged in court |
| 2024 | Biden-era rule moves lottery to one entry per worker | Aimed at duplicate-registration gaming |
| 2020 | Trump-era wage and specialty-occupation rules | Struck down in federal court |
The pattern explains a lot. Executive action is fast and visible, which suits an election calendar, but it is fragile. Proclamations and rushed rules invite lawsuits, and courts have repeatedly blocked them on procedural grounds. A statute would be slower to pass but much harder to undo.
There are reasons Congress stalls. Tech employers, universities and hospitals lobby hard to protect the program. Restrictionists want cuts, not tweaks. And H-1B reform has historically been held hostage to broader immigration deals that never close. Vance himself acknowledged where the fix belongs when he recently told frustrated listeners to ask their congressman to repair the program. For now, the branch with the clearest authority to rewrite the rules is the one doing the least.
By the numbers
| Measure | Figure |
|---|---|
| New H-1B visas available each year | 85,000 (65,000 regular + 20,000 for US master’s graduates) |
| Share of H-1B visas going to Indian nationals | About 70% |
| H-1B beneficiaries in computer-related jobs, FY2025 | 62% |
| Employment-based green cards issued per year | About 140,000 |
| Per-country limit on green cards | 7% of each year’s total |
| Indians in the employment-based green card backlog | Nearly 1 million, about 79% of a 1.25 million backlog |
| H-1B visas to the eight suspended companies since 2009 | More than 230,000 (Labor Department figure) |
| Labor certifications to those companies since 2009 | More than 100,000 (Labor Department figure) |
Most H-1B petitions sit at the wage levels the new lottery favors least
| DOL wage level | Share of cap petitions, FY2020-24 | Lottery entries under new rule | Estimated selection odds |
|---|---|---|---|
| Level I | 28% | 1 | 15.3% |
| Level II | 55% | 2 | 30.6% |
| Level III | 12% | 3 | 45.9% |
| Level IV | 5% | 4 | 61.2% |
The table captures the policy shift underway even before the PERM suspension. Under the wage-weighted lottery that took effect in February 2026, a Level IV registration gets four entries and a Level I gets one. By DHS’s own estimates, that cuts a Level I registration’s chance of selection to about 15 percent. The levels where most H-1B filings have historically sat now face the longest odds, which pushes employers either to raise pay or to stop sponsoring entry-level graduates.
The backlog figure is the one to watch. Because of the 7% per-country cap, an Indian professional filing today in the most common categories can face a wait measured in decades. Any pause in PERM processing pushes that queue further back.
What happens next
Expect lawsuits. The administration’s most aggressive H-1B moves have tended to fail in court on procedure rather than substance. The $100,000 fee policies were set aside on October 1 because required rulemaking steps were skipped. A blanket refusal to process applications that employers filed lawfully, without company-specific findings, invites a similar challenge under the Administrative Procedure Act. The affected companies, and possibly groups of affected workers, have strong incentives to sue.
Watch the six-year clock. H-1B status is generally capped at six years. Under a 2000 law known as AC21, workers can extend beyond six years if a labor certification or green card petition was filed at least a year earlier. Workers whose PERM cases were filed well in advance and remain pending, not denied, may still qualify for those extensions. Workers whose employers had not yet filed are in the most exposed position. Immigration lawyers will be watching closely for how the Labor Department treats pending cases.
Job changes become strategy. Workers with an already-approved green card petition generally keep their place in line if they move to another employer, unless the approval is revoked. Expect some employees of the suspended firms to look for sponsors not on the list, even though a new employer would have to restart the PERM step.
The relationship absorbs another hit, for now. India chose words that were sharp on dignity but restrained on policy. That leaves room for quiet diplomacy. A further escalation, such as more companies added to the list or more inflammatory language, would test that restraint. With the November 3 midterms weeks away, H-1B restrictions remain a useful message for the administration with its base, so a softening before Election Day looks unlikely.
India has its own question to answer. According to the Institute of International Education’s Open Doors 2025 report, more than 363,000 Indian students were enrolled in US institutions in 2024-25, the most from any country, and Indian participation in post-study work training jumped about 47 percent in a year. For a generation of top graduates from India’s leading institutes, a US career has become the default ambition. New Delhi has every reason to press Washington to keep that door open for people who have earned American degrees and want to contribute. It also has reason to ask why so many of its most talented graduates see their best future abroad, and what it would take to keep more of them at home.
Immigration Analytics will update this story as company responses, agency guidance and court filings become available. This article is for general information and is not legal advice.
Sources
- Ministry of External Affairs, Government of India, statement dated October 9, 2026
- ‘Indentured servants’: US green card move will hit thousands of IT workers (Al Jazeera)
- Grassley, Durbin H-1B and L-1 Visa Reform Act (Senate Judiciary Committee)
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