Indians prefer to hire their own, this is very well known. And because this can’t even be discussed honestly, US corporations are powerless against this preferential treatment.
Why not treat this any differently than Whites preferring to hire their own?
In the US, it is no more OK, legally, to discriminate in hiring on the basis of nationality for any nationality compared to any other.
I would wager that conditioning on US citizenship is less restrictive than conditioning on any other citizenship when seeking diverse historical nationality.
There are exactly two jobs where that is required, and only one is kind-of in the military, in that it is legally the apex of all military chains of command.
(There are other security-related, especially in the military, jobs where actual or potential dual citizens, the latter more commonly being an issue when people have foreign born parents, may be required to renounce any other citizenship than American.)
It is absolutely discrimination, but legal (and legally-mandatory) discrimination. That it may be “common sense” does not change that it is, absolutely, discrimination.
But even then, it is not, as suggested upthread, more OK for Iranians to hire Iranians than for Americans to hire Americans, whether talking about nationality, national origin, or ethnicity. (Fir nationality, there are narrow cases where the latter is mandatory and the former is prohibited no matter who is hiring, sure, but that's the opposite of what was suggested.)
I've worked at Silicon Valley startups that were that way. I remember thinking this is really odd how high the concentration was (probably about 70% Indian). Didn't really bother me because it was a great team and honestly one of the best companies I worked at.
It didn't really seem like they discriminated in hiring and I never felt discriminated against at work. It was just that coworkers referred people they already knew.