India’s technology outsourcing industry faces a new challenge from Washington as U.S. lawmakers push the Halting International Relocation of Employment (HIRE) Act 2025. The bill seeks to impose a 25 percent tax on payments American companies make to foreign workers for services consumed in the United States, while also eliminating the ability to deduct such expenses from taxes.
The measure, if passed, would strike at the core cost advantage that companies such as Tata Consultancy Services and Infosys have long enjoyed, as well as the fast-growing business of global capability centers. More than half of revenue at India’s leading tech firms comes from U.S. clients.
The proposal arrives amid rising political pressure on H1B visas, with Trump officials calling the program a “scam.” Industry experts caution that the bill may not clear Congress but warn Indian firms to prepare by diversifying markets and investing in AI-driven services.