Jairam Ramesh warns US 'HIRE Act' may shake India's IT sector

A fresh tremor of economic unease rippled through India’s policy circles on 6 October 2025, when US Senator Bernie Moreno of Ohio introduced the “Halting International Relocation of Employment Act” (HIRE Act) — a proposal that Congress leader Jairam Ramesh says could reshape the contours of India’s economic engagement with the United States.

Now placed before the Senate Committee on Finance, the Bill seeks to impose a 25 per cent tax on any “outsourcing payment” — defined as money paid by an American company to a foreign entity for work that ultimately benefits US consumers. What appears on paper as a fiscal safeguard, Ramesh cautioned, carries profound strategic and economic implications for India.

Calling the legislation “a serious warning signal,” Ramesh said the HIRE Act could strike at the very heart of India’s IT services, BPO, consulting, and global capability centre (GCC) sectors — industries that have powered India’s rise as a global digital hub and sustained its export engine for over two decades. While nations like Ireland, Israel, and the Philippines may also feel the ripple effects, he warned, “the maximum impact will be on India.”

On Oct 6, 2025, Senator Bernie Moreno of Ohio introduced a Bill in the US Senate titled "Halting International Relocation of Employment Act" or " HIRE Act." The Bill has been referred to the Senate Committee on Finance.

The Bill proposes a 25% tax on any US person making an…

— Jairam Ramesh (@Jairam_Ramesh) November 4, 2025

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Ramesh described the Bill as a reflection of a shifting mood in Washington, where economic anxiety is giving way to protectionist reflexes. “A new mindset seems to be taking hold in the US — that while blue-collar jobs were ‘lost’ to China, white-collar jobs must not be ‘lost to India,’” he observed, calling the move “yet another blow to what was once a robust and promising India–US economic relationship”.

Whether the Bill advances, gets diluted, or fades into legislative limbo, Ramesh said, its symbolism is unmistakable — a sign that the winds of globalisation are turning cold. “If the HIRE Act ever becomes law,” he warned, “it will light a fire in the Indian economy, compelling New Delhi to confront a new normal — one where digital borders rise and economic nationalism takes centre stage.”

For India, he said, the moment calls for strategic reflection and deft diplomacy, as the world’s most dynamic service economy braces for a potential redrawing of its digital destiny.