On Friday, the U.S. Department of Labor suspended Microsoft, Adobe and several major Indian information technology companies from a program used to apply for permanent residency for employees on H-1B visas. Vice President JD Vance said the administration wanted companies to employ American workers. The action affects firms’ ability to seek permanent residency for those employees; India’s foreign ministry said it doesn’t change the validity of existing H-1B visas or the status of visa holders and their dependents.
Vance made his remarks Thursday. He said companies “cannot lay off American workers and then replace them with foreign indentured servants.” India’s Ministry of External Affairs called his language “deeply offensive” in a government statement the next day. The dispute centers on the treatment of foreign workers and competing claims: that companies should employ American workers, and that Indian professionals contribute to the U.S. economy.
The policy and the workforce
The Labor Department’s suspensions cover Microsoft, Adobe and Indian companies including Cognizant, Infosys, Capgemini, Tata Consultancy Services, Wipro and HCL. The program at issue is the Permanent Labor Certification program. The suspended companies can’t use it to apply for permanent residency for employees on H-1B visas.
Official data showed that about 70% of H-1B beneficiaries in 2025 were born in India. That figure describes beneficiaries’ place of birth; it doesn’t establish how many employees of the named companies the suspensions affect. Neither the government statement nor the reported action says current H-1B visas or the status of visa holders and their dependents will change.
Vance accused Microsoft of replacing 6,000 laid-off workers with people on H-1B visas. His office didn’t immediately respond to a request for comment. The dispute involves the administration’s stated aim of employing American workers, an accusation that Microsoft replaced laid-off workers, and a government measure restricting several companies’ access to a permanent-residency application program.
India’s response and company plans
India’s ministry said Vance used “terminology that carries painful historical and colonial legacy connotations.” It also said: “Such descriptions are unwarranted and ignore the fact that Indian professionals in the United States are highly educated and skilled contributors to its economy and innovation ecosystem.”
The ministry told Indian citizens that the U.S. measures wouldn’t affect existing H-1B visas or the status of holders and dependents. “Talent mobility adds value to both economies,” it said, adding that the suspensions “do not advance the shared ambitions of both countries.” Those statements set out India’s position; they don’t alter the Labor Department’s announced restrictions.
NASSCOM, the IT industry body, said Indian technology companies had “significantly reduced their dependence on H-1B visas” in recent years and were expanding domestic hiring for their U.S. workforces. Tata Consultancy Services, described as India’s largest IT company, said its H-1B applications had been in “single digits” over the previous two years. The company also said it intended to hire another 15,000 people in the U.S. over the next five years.
The source describes a U.S. department imposing restrictions through a U.S. labor certification program. It doesn’t identify any transfer of decision-making authority to an international institution. In June, a federal judge blocked the $100,000 H-1B visa fee that U.S. President Donald Trump imposed the previous year. The dispute now involves the department’s suspensions, India’s objection to Vance’s wording, and companies’ stated plans to hire in the United States.