Days after US Republican Senator Bernie Moreno introduced Halting International Relocation of Employment (HIRE) Act, IT industry experts say that proposed Bill will alter the cost structure for the US companies and likely reshape Indian IT firms and Global Capability Centres (GCCs).
The Bill aims to impose a 25% tax on US companies that outsource jobs in tech and other sectors. Jaspreet Singh, partner and chief revenue officer, Grant Thornton Bharat, said that the proposed HIRE Act, with its 25% outsourcing tax and denial of tax deductions on such payments, would fundamentally alter the cost structure for US companies outsourcing to Indian IT firms and GCCs.
“If enacted, this legislation may pressure US enterprises to reconsider offshore delivery models and prompt Indian service providers to recalibrate their global strategies. The overall impact will depend on legislative outcomes, enforcement clarity, and how policy definitions evolve, especially regarding what constitutes ‘consumer benefit’ and anti-avoidance measures,” Singh told TNIE.
He further said: "The introduction of the HIRE Act is expected to reshape how Indian IT firms and Global Capability Centers (GCCs) engage with global talent markets. While its immediate impact may create new compliance and cost considerations, in the long term it could also encourage companies to diversify talent strategies, invest in local upskilling, and strengthen their global delivery models."
In a post on X on September 5, Moreno said, “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.”
An IT company official said that most of the big companies in India are not considering sending their employees to the US, instead they are focusing ON other markets like Europe and Southeast Asia. The Indian IT companies are unsure of what new laws US President Donald Trump’s administration would approve, affecting their employment.
Information technology advocacy body -- NASSCOM -- did not comment on the queries sent by TNIE.
Meanwhile, rating agencies are maintaining AN outlook on THE IT sector as cautious. India Ratings said recently that the revenue growth in India's tech sector was 2.7x that of THE US Nominal GDP growth rate in FY22. The multiplier has compressed to A historically low level of 0.7x in FY25.
The outlook on THE tech sector is cautious because of a weaker global macroeconomic situation with subdued real-GDP growth in the US and Europe. Rapidly evolving tech-cycle is leading to slowdown in corporate tech-spending as companies wait for disruption to stabilize.
According to a Xpheno September report, the Indian Tech jobs market has seen sharp contraction and minor in the last three years. India’s total tech openings fell from 174000 in September 22 to 102000 as of September 2025, a staggering decline of 41% in the last three years.