U.S. President Donald Trump is pressing home the advantage, as they say in sports. After showcasing the biggest advertisement for his stiff tariff policy against India — the Essar Group’s American subsidiary announcing an $18-billion investment in a U.S. steel project — Trump is going full throttle. This time, the target was Indian information technology (IT) companies.
On October 8, the U.S. suspended several companies from the Permanent Labor Certification Program, which allows firms to apply for green cards for H-1B visa workers, saying the practice takes jobs away from Americans. The most affected companies are Cognizant, Infosys, Tata, Wipro, and HCL.
U.S. Labor Secretary Keith Sonderling said the U.S. government would not accept or process any new or pending permanent labor certification applications involving these companies.
U.S. journalist Fareed Zakaria said that Trump, a real estate developer, assesses who holds more leverage and pushes as hard and publicly as possible to dominate and extract the maximum price. Trump knows very well that the U.S. market is India’s Achilles’ heel.
The United States is a major destination for Indian goods, a crucial market for its IT companies, and an important source of employment opportunities for Indian professionals. Trump is using this leverage. The U.S. president, like the chief minister of any Indian state, is claiming that his tariff policies are bringing investment and manufacturing jobs to the U.S. He is welcoming foreign capital, not foreign labor. Vice President J.D. Vance said that the action was a response to companies abusing the system to hire lower-paid foreign workers at the expense of U.S. workers. His ire was directed at Microsoft, whose CEO, Satya Nadella, is of Indian origin.
According to Microsoft’s diversity data, Asian employees make up approximately 34.9 percent of Microsoft’s overall workforce. Some say a major chunk of this comprises Indians. This is why Vance lashed out at Microsoft, saying the company had abused the H-1B visa system to replace laid-off American citizens with foreign workers. He asserted that “no company in the United States, unfortunately, has abused this system more than Microsoft.”
The pressure is coming from several directions. On September 18, Trump signed a bill that gives him the power to impose tariffs of up to 100 percent on goods from countries that continue to buy Russian oil and natural gas. India is one of the world’s biggest importers of Russian oil.
One reason why India has avoided taking a confrontational position is that the United States is the only country with which India has a trade surplus, unlike China and Russia. India recorded a goods trade surplus of nearly $34 billion with the U.S., while the U.S. goods trade deficit with India reached $58.4 billion in 2025.
Trump has frequently criticized this imbalance, saying it has been “one-sided for years.” Trump argues that while India sells “massive amounts of goods” to the U.S., its largest client, high tariffs prevent reciprocal access for American companies. He has used the threat of tariffs to pressure India into opening its heavily protected domestic markets, such as its agricultural and automobile sectors, to American companies.
This is where Zakaria’s real estate analogy becomes particularly relevant. Trump has several points of leverage. But the question is: how far can India go in reducing the trade imbalance?
Indian Finance Minister Nirmala Sitharaman’s statement in this regard is very significant. She said that trade talks with the U.S. had reached a plateau “beyond which giving or taking might be very, very difficult.”
This is the first time India has admitted to the pressure being exerted by the Trump administration.
Sitharaman said the U.S. wants to “reduce” its trade imbalance with India and wants to make up “for all that they’ve lost over these years.”
“When you’re talking of trade and trade imbalance being the sole criteria to reduce the imbalance, to what extent beyond negotiation can you go?” Sitharaman said.
This plateau has become a sort of war of attrition between India and the United States. How long it will continue, only time can tell. But the longer the stalemate persists, the greater the economic costs for both countries.