Congress flags US 'HIRE Act', warns of impact on India's IT, outsourcing sectors

The Congress on Tuesday raised concern over a new Bill introduced in the US Senate that seeks to impose a 25 per cent tax on payments made by American companies for outsourcing work abroad, warning that it could have a “direct and deep impact” on India’s IT, consulting and BPO industries.

In a post on X, Congress leader Jairam Ramesh said that on October 6, 2025, Senator Bernie Moreno of Ohio introduced the “Halting International Relocation of Employment Act” or “HIRE Act” which has been referred to the Senate Committee on Finance.

The Bill, he said, proposes a 25% tax on any US person or company making an “outsourcing payment”, defined as any money paid to a foreign person whose work benefits consumers in the United States.

Calling the legislation, a reflection of a “growing mindset in the US” against outsourcing to India, Ramesh cautioned that while the measure may or may not pass, or could be modified or delayed, it signals a shift in sentiment that India cannot ignore.

“The Bill has a direct and deep impact on India's IT services, BPO, consulting and GCCs (global capability centres). Other countries like Ireland, Israel, and Philippines too will be impacted but the maximum effect will be on India's exports of services which has been a marked success story over the past quarter of a century,” Ramesh noted.

He further observed that the proposed legislation underscores an emerging protectionist sentiment in the US, adding: “The Bill reflects a growing mindset in the US that while blue-collar jobs were 'lost' to China, white-collar jobs should not be 'lost to India.'”

The Congress leader said the India-US economic relationship, once seen as a pillar of bilateral growth, has faced multiple setbacks in the past year, with the HIRE Act being the latest example.

“If ever HIRE becomes a reality, it will light a fire in the Indian economy which may have to face a new normal in relation to the US,” he added.