Trump’s HIRE Act Push Could Hurt Big Tech More Than India

US President Donald Trump has signalled a policy shift, urging US tech companies to stop outsourcing jobs to India as part of his broader America First push to protect domestic employment and innovation. 

Trump and his allies are backing a new US bill, the Halting International Relocation of Employment (HIRE) Act, which discourages American companies from outsourcing jobs—particularly to countries like India—by imposing a 25% tax on payments made for foreign-based services consumed in the US. 

Contrary to the expected outcomes, the move could open new opportunities for India’s tech sector, especially for startups, as per industry voices across platforms and a few that AIM spoke to. 

Even if US outsourcing restrictions trigger workforce reductions, India’s vast and highly skilled tech talent pool is unlikely to sit idle, Gaurav Vasu told AIM. Vasu is the founder & CEO of UnearthInsight, a software firm that enables analysing and comparing operating metrics with competitors at a click of a button.

Native product engineering firms, boutique consultancies, and the vibrant startup ecosystem will continue to absorb top talent, he said. 

Vasu added that opportunities beyond the tech sector are also thriving, with BFSI, retail, healthcare, manufacturing, and logistics investing heavily in digital transformation.

Caleb Friesen, a tech influencer, recently suggested on X that a US ban on IT outsourcing to India could paradoxically act as a huge blessing in disguise. He argued that major Indian IT firms like TCS, Infosys, Wipro, and HCL could see significant revenue losses, triggering mass layoffs. However, he added that tens of thousands of talented engineers, many based in Bengaluru, might take this as an opportunity to finally start their own companies or join existing startups.

Union minister Ashwini Vaishnaw said that India’s active discussions with multinationals and foreign governments to safeguard the growth of its nearly $300 billion tech sector are ongoing, in a recent interview with Moneycontrol.

Similarly, on September 9, Karnataka’s IT minister Priyank Kharge said that proposed US tariffs on Indian IT services are not expected to significantly impact the country’s billion-dollar export industry. “It’s my personal opinion, the dependence of various geographical entities is way too much on the talent that we have here,” he said.

Big Tech’s Deep Dive 

Vasu said that as of 2025, 174 Fortune 500 companies have established a presence in India, primarily through Global Capability Centers (GCCs). These companies operate over 390 centres and collectively employ around 950,000 professionals in India, he said, stressing upon the importance of India’s tech ecosystem and talent.

The likes of Microsoft, Amazon, Goldman Sachs, Google, JP Morgan Chase, Eli Lilly, Pfizer, AstraZeneca, Roche, Bayer, Ford, Renault Nissan, Caterpillar, Hitachi Energy, McDonald’s, and Sandoz—industry leaders across sectors—depend on their India operations, said Vasu.

Leading tech companies such as Google, Apple, Meta, Microsoft, and OpenAI are deepening their bets on India. 

By expanding office footprints, establishing new engineering hubs, and pursuing AI-focused partnerships, global tech giants are positioning India as a central pillar of their international growth plans.

Google and Meta have announced AI and digital partnerships with Reliance while expanding local R&D and data infrastructure. OpenAI, meanwhile, is setting up a large data centre in India through local collaborations, has opened its India office in Delhi, and has recently begun hiring.

In an exclusive interview with AIM, Microsoft’s Puneet Chandok spoke about the company’s two major commitments in India—a $3 billion investment over two years in cloud and AI infrastructure, and a pledge to train 10 million Indians in AI by 2030. 

“We’re on track with our investment plans, and on the skilling front, we’ve already trained 2.4 million people,” he said, adding that 65% of those trained are women and 74% come from tier-2 and tier-3 towns. Chandok added that Microsoft’s goal is to scale from 2.4 million to 10 million over the next five years.

Similarly, AWS is ramping up its India investments. By 2030, it plans to invest $12.7 billion across its Mumbai and Hyderabad regions, contributing $23.3 billion to India’s GDP and supporting over 1.31 lakh full-time jobs annually.

Google is investing $6 billion in India to build Asia’s largest data centre and green energy infrastructure in Visakhapatnam, Andhra Pradesh, marking its single biggest project in the country and its first hyperscale facility there.

How the HIRE Act, if brought into practice, affects these investment plans and collaborations remains to be seen.  

Who Really Gets Hurt? 

Vasu highlighted the scale of US reliance on Indian outsourcing, noting that about $190–200 billion, or nearly 65–70% of India’s IT services, GCCs, BPO, and product engineering business, is tied to the US market. He cautioned that while a complete halt would certainly hurt India, the bigger shock would be felt in America. 

“For US enterprises, eliminating outsourcing could drive up costs by $700–800 billion, cut margins by 2–4% or more depending on destinations like India, Mexico, Poland, or Southeast Asia, and even impact share prices across sectors,” he explained.

Beyond cost, Indian engineers contribute significantly to innovation, with 60% of some firms’ tech solutions and patents originating from India-based teams, according to UnearthInsight.

The story of Indian talent goes beyond cost savings. With nearly 6 million professionals in STEM fields and strong growth in non-US markets, India remains indispensable for global tech innovation. 

As US companies grapple with talent shortages and wage inflation, Indian engineers, startups, and growing domestic industries are set to benefit, turning a potential policy shock into an opportunity for India to consolidate its position as a global tech powerhouse.

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