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(CNN Business) —  

India and the United States are risking a fight over trade and technology. Both sides have applied new tariffs, and the Trump administration has raised objections over barriers American companies face.

Now, there’s reportedly a new threat hanging over the relationship — the United States may be looking to hit India where it hurts by slashing the number of visas available to its skilled workers.

The Trump administration has told India it is considering capping the number of H-1B visas granted to some countries, Reuters reported Thursday, citing three sources with knowledge of the matter. The cap would apply to countries that force foreign companies to store data locally, according to Reuters.

“We have not heard anything officially from the US government on this matter,” Raveesh Kumar, the spokesperson for India’s Ministry of External Affairs, told reporters on Thursday.

The US State Department denied considering a cap on the number of H-1B visas.

“The Trump Administration has no plans to place caps on H-1B work visas for nations that force foreign companies to store data locally,” a State Department spokesperson told CNN.

US Secretary of State Mike Pompeo is due to arrive in New Delhi next week, the first visit by a high-ranking American official since Indian Prime Minister Narendra Modi began his second term in office following a comprehensive election win last month.

Pompeo “looks forward to his trip to New Delhi next week to advance our strategic partnership,” the spokesperson added.

Damage all round

H-1Bs have been a major irritant in the US-India relationship in recent years.

The visa program allows tens of thousands of workers to come to America every year, and India accounted for 75% of approved H-1B applications in 2017 — the latest year for which US government data is available. China, the second-biggest recipient, accounted for less than 10%.

Trump has repeatedly accused tech companies in