NEW DELHI: After Indian goods exports, the US is now targeting India’s services exports. A new bill, the "Halting International Relocation of Employment Act," or "HIRE Act," has been introduced in the Senate, proposing a 25% tax on certain payments US taxpayers make to foreign persons for services that benefit US consumers. The bill has been sponsored by Senator Bernie Moreno.
“While college grads in America struggle to find work, globalist politicians and C-Suite executives have spent decades shipping good-paying jobs overseas in pursuit of slave wages and immense profits – those days are over,” Moreno has said.
He further said that it’s time to fight for working-class Americans and ensure they can work and retire with dignity. If companies want to hire foreign workers instead of Americans, my bill will hit them where it hurts: their pocketbooks.
The HIRE Bill, if enacted, may make Indian IT services exports to the US expensive. The US accounts for over 50% of India’s software services exports, which was around $225 billion in 2024-25.
Earlier, similar voices have been raised by far-right US commentator Jack Posobiec, who had said in a social media post: “Tariff the foreign remote workers. All outsourcing should be tariffed. Countries must pay for the privilege of providing services remotely to the US, the same way as goods. Apply across industries, levelled as necessary per country." The post was shared by U.S. President Donald Trump’s trade advisor, Peter Navarro.
Key provisions of the HIRE Act
The HIRE Act targets what it defines as an "outsourcing payment," which includes any premium, fee, royalty, or service charge made in the course of a trade or business to a foreign person. The payment must be for labour or services whose benefits are directed, either directly or indirectly, to consumers in the United States. The proposed tax is equal to 25% of the payment amount.
For payments that cover services directed to consumers both inside and outside the US, the tax would apply only to the portion of the payment that corresponds to services for US consumers.
According to the Bill, a "foreign person" is defined as any person who is not a US person, but the term does not include corporations or partnerships organised under the laws of a US possession.
The bill gives the Secretary of the Treasury the authority to require US persons to file returns regarding these payments. It also proposes a significant increase in the penalty for failing to pay the tax, raising the penalty from 0.5% to 50% for each month of failure, without the usual 25% aggregate cap. The bill specifies that the tax would not be deductible from a US taxpayer's income.
Creation of the domestic workforce fund
In addition to the tax, the HIRE Act would establish a new trust fund in the US Treasury called the "Domestic Workforce Fund". The fund would receive money from the new outsourcing tax, as well as related penalties and additions to tax.
The funds would be used exclusively for workforce development and retraining programs administered by the Department of Labor, apprenticeship programs, and grants to states for initiatives aimed at communities with high job displacement rates.
The bill, if enacted, would apply to payments made after December 31, 2025.