So, a little bit of reality here...
In India, what we take for granted as a "background check" is actually not possible. While here in the US we have a massive database called NCIC (which is really the name of the organization that runs it, but everyone calls it NCIC anyways) there's not really such a clearinghouse in India. The individual municipalities keep their own records...often on paper...about past crimes, but there's no centralized source where you can go and check. As a result, "background checks" basically don't exist, because they are exercises in futility unless you're looking to check on a specific event related to a person.
Now, to be 100% accurate, I will say that India did just recently create a centralized database, a year ago I believe. But the database is barely getting any input at all at this point. And on top of that, fake documentation is really easy to obtain in India, there's a lot of corruption...there's a larger systemic issue with just being able to take someone's unique identifying information and do a "background check" to make sure they haven't been convicted of raping a whole school or something in the past.
I've run into this before, with regard to situations where certain kinds of business processes and information handling couldn't be outsourced because of regulatory requirements for background checks, but I also found an interesting analysis that is in the context of this situation with Uber: http://qz.com/308888/the-secre...
It's obvious to pretty much everyone that a fleet of off-shore or H1B programmers bill cheaper to your customer than supplying them with actual citizens who can do the same job.
That's common sense.
Why? Unless discrimination is in some way common sense, I don't get it. The actual country of citizenship shouldn't effect how much someone gets paid/billed? How does this "common sense" logic apply to legal residents (green card holders) who are neither US citizens, nor H1B's?
Since you expect to have wage discrimination purely based on country of citizenship, I wonder what you think is the right price is for a labor force from a certain continent below Europe? hmm.. I wonder if you think it should be zero - That would surely explain the rest of your "common sense" logic.