India’s $283 billion IT industry, a global leader in software services, faces growing uncertainty as U.S. lawmakers propose a 25% outsourcing tax. The HIRE Act, introduced by Senator Bernie Moreno, aims to penalize American firms that hire foreign workers instead of U.S. employees, with revenue directed toward workforce development. The bill also proposes barring outsourcing payments from being claimed as tax-deductible expenses.
Although the bill’s chances of passing in its current form remain slim, experts warn it could reshape the outsourcing landscape. Companies may delay contracts, renegotiate terms, and demand greater delivery flexibility. Analysts caution that combined federal, state, and local taxes could push effective rates on outsourced services as high as 60%, significantly raising costs for U.S. firms dependent on Indian IT providers like TCS, Infosys, HCLTech, Wipro, Tech Mahindra, and LTIMindtree.
India’s IT sector, which contributes over 7% to GDP and serves clients including Apple, Cisco, Citigroup, and FedEx, has already been hit by slowing demand in the U.S. as inflation and tariff concerns weigh on tech spending. Outsourcing critics argue it causes U.S. job losses, fueling support for such proposals.
Legal experts expect strong pushback from American corporations, warning of lobbying and litigation if the bill advances. Industry watchers also anticipate a diluted version of the bill with limited provisions or delayed enforcement due to practical challenges. Still, political pressure to reduce reliance on foreign outsourcing is mounting, with calls from figures like White House trade adviser Peter Navarro for tariffs on services.
Global capability centres (GCCs), which have become vital innovation hubs for U.S. firms in India, could also face headwinds, especially for new investments. However, experts note that America’s shortage of skilled tech talent ensures outsourcing will remain essential despite rising political risks.


Australia’s Economic Growth Slows in Q3 Despite Strong Investment Activity
European Oil & Gas Stocks Face 2026 With Cautious Outlook Amid Valuation Pressure
U.S. to Reduce Import Duties on South Korean Autos Under New Trade Agreement
FDA Memo Raises Questions About Possible COVID-19 Vaccine Links to Rare Child Deaths
Japan Approves $117 Billion Budget to Power Stimulus and Support Growth
Asian Markets Mixed as Fed Rate Cut Bets Grow and Japan’s Nikkei Leads Gains
Afghan Suspect in Deadly Shooting of National Guard Members Faces First-Degree Murder Charge
Australia Releases New National AI Plan, Opts for Existing Laws to Manage Risks
Asia’s IPO Market Set for Strong Growth as China and India Drive Investor Diversification
Gold Prices Steady as Markets Await Key U.S. Data and Expected Fed Rate Cut
U.S. Expected to Expand Travel Ban to More Than 30 Countries
Japan’s Nikkei Drops as Markets Await Key U.S. Inflation Data
USPS Expands Electric Vehicle Fleet as Nationwide Transition Accelerates
Gold Prices Edge Higher as Markets Await Key U.S. PCE Inflation Data
Citi Sets Bullish 2026 Target for STOXX 600 as Fiscal Support and Monetary Easing Boost Outlook 



