Context
- The Ministry of External Affairs (MEA) sharply rebuked the United States for characterising foreign tech workers as "indentured servants".
- The remark followed a decision by the US Department of Labor (DoL) to freeze PERM (Program Electronic Review Management) applications for eight global technology majors.
- Five of the eight affected firms are India-centric IT companies: TCS, Infosys, Wipro, HCL Technologies and Cognizant.
What is the PERM Programme?
- PERM is the official electronic system managed by the US Department of Labor for obtaining a Permanent Labor Certification (PLC).
- It is the mandatory first step for an employer sponsoring a foreign worker for Permanent Residency (Green Card).
- It applies to employment-based immigrant categories:
- EB-2 – professionals holding advanced degrees or persons of exceptional ability.
- EB-3 – skilled workers, professionals with a bachelor's degree, and other workers.
- Labour Market Test (LMT): The employer must prove that
- no qualified US workers are available for the role; and
- hiring a foreign national will not depress local wages.
PERM vs H-1B Visa
| Feature | H-1B Visa | PERM |
|---|---|---|
| Nature | Non-immigrant (temporary) work visa | Immigrant pathway to permanent settlement |
| Validity | 3–6 years | Not a visa; a labour certification |
| Status in current freeze | Unaffected | Frozen for the eight firms |
| Indian share | Indians hold ~70–72% of H-1B visas | — |
Historical Context: The 'Girmitiya' (Indentured Servitude) System
- Introduced by the British after the abolition of slavery in 1833.
- Over 1.5 million Indians were transported under penal 5-year contracts (Girmit) to plantations in:
- Fiji, Mauritius, Trinidad & Tobago, Guyana, Suriname, South Africa and Malaysia.
- The MEA rejected any equation of this colonial bondage with modern Indian STEM professionals, pointing out that they are the highest-earning ethnic demographic in the US.
Broader Strain in India–US Relations
Areas of continued strength
- Strategic cooperation under the Quad.
- US-India COMPACT – Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology.
- iCET – Initiative on Critical and Emerging Technology.
Three triggers of economic friction
- Curbs on Indian skilled workers – US protectionism restricts cross-border movement of Indian professionals under Mode 4 of the WTO's General Agreement on Trade in Services (GATS), a key strength of India's services economy.
- High visa costs – a steep USD 100,000 one-time fee on new H-1B applications, raising the cost of sending Indian tech workers onsite.
- Immigration pathway squeeze – the PERM freeze blocks the green-card route for Indian employees of major IT firms.
Significance for India
- Indian Diaspora & Remittances: Any squeeze on skilled migration affects the Indian diaspora, remittance flows and India's services export model.
- Services Trade & GATS: India has consistently pushed for liberalisation of Mode 4 (movement of natural persons) in WTO negotiations; this freeze adds to that grievance.
- IT Sector: Indian IT firms depend on onsite deployment; PERM freezes can disrupt talent retention and delivery models.
- Diplomatic Balance: India must manage strategic convergence (defence, technology, Indo-Pacific) alongside economic divergence (trade, visas, tariffs).
Key Terms for Prelims
- PERM / Permanent Labor Certification – US DoL system; first step to employment-based Green Card.
- EB-2 / EB-3 – Employment-based immigrant visa preference categories.
- H-1B – Non-immigrant specialty occupation visa; Indians ~70–72% share.
- Girmitiya System – Post-1833 British indentured labour migration of 1.5 million+ Indians.
- GATS Mode 4 – WTO services supply mode covering movement of natural persons.
- Quad, COMPACT, iCET – Pillars of contemporary India-US strategic cooperation.
> Read More: Navigating India-US Ties