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Recent discourse has emerged surrounding a proposed piece of legislation in the United States, which could have significant repercussions for India’s thriving technology-services sector. The bill, known as the Halting International Relocation of Employment (HIRE) Act, introduced by Senator Bernie Moreno, is designed to curb outsourcing by imposing taxes on companies that rely on foreign labor. This move has drawn attention and concern from various quarters, particularly in India.
On October 6, Senator Bernie Moreno of Ohio introduced the Halting International Relocation of Employment Act — the “HIRE Act” — and the bill “has been referred to the Senate Committee on Finance.” Jairam Ramesh, Member of Parliament and General Secretary (Communications) of the Indian National Congress, posted on X on Monday: “The Bill proposes a 25% tax on any US person making an outsourcing payment – defined as ‘any money paid by a US company or taxpayer to a foreign person whose work benefits consumers in the United States.’”
Indian National Congress General Secretary Jairam Ramesh recently took to social media to express his apprehensions about the potential impact of this legislation. Ramesh highlighted that the bill could have profound effects on India’s IT services, BPO, consulting, and global capability centers. He speculated that while countries such as Ireland, Israel, and the Philippines might also feel the impact, India, a major player in service exports over the past 25 years, would bear the brunt.
Ramesh acknowledged the uncertainty surrounding the bill’s future, noting, “It may or may not pass. It may get modified. It may just linger.” However, he pointed out a growing sentiment in the U.S. against losing white-collar jobs to India, akin to how blue-collar jobs were previously outsourced to China. He warned that if the HIRE Act became law, it could necessitate a significant adjustment in India’s economic relationship with the U.S., potentially igniting a new era for the Indian economy.
The proposed legislation includes provisions for the creation of a “Domestic Workforce Fund.” This fund would be sustained by the excise tax revenues generated, with the bill explicitly disallowing deductions for any outsourcing payments. The aim, according to Moreno’s press release, is to protect American workers by discouraging companies from seeking cheaper labor abroad and instead investing in the domestic workforce.
Senator Moreno has positioned the HIRE Act as a measure to safeguard American jobs, emphasizing its intention to create incentives for domestic employment. The revenue from the imposed tax would reportedly fund workforce development programs aimed at bolstering the American middle class. As the bill continues to draw attention, its potential implications on international economic relations remain a topic of keen interest and debate.
Moreno asserted, “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.” His office noted that “if companies want to hire foreign workers instead of Americans, my bill will hit them where it hurts: their pocketbooks.”
Business Standard explained said skilled Indian professionals “already grappling with the newly imposed $100,000 H-1B visa fees may soon face another setback” and detailed that former Reserve Bank of India Governor Raghuram Rajan remarked, “What we’re seeing is a creeping extension of tariffs from goods to services. This is a threat.” Business Standard added that “Trump’s political base has been vocal about reducing dependence on foreign labour, particularly Indian tech workers.”
Business Standard detailed Indian sector exposure, noting U.S. business is the biggest revenue source for India’s major IT companies, and listed potential consequences: “Reduced demand for outsourced jobs,” “Tighter visa environment,” and “Impact on India’s IT exports.” Rajan added that the HIRE Act is “much more important for us” than the H-1B fee hike.
Moreno’s new outsourcing tax proposal arrives immediately after his separate SAFE HIRE Act gained major labor union backing. As Breitbart News previously reported in September 25: “Teamsters President Sean M. O’Brien is throwing his support behind a plan from Sen. Bernie Moreno (R-OH) that would hugely increase penalties for company executives who hire illegal aliens for American jobs, including prison sentences.”
In that earlier immigration enforcement proposal, Moreno “introduced the SAFE HIRE Act to require companies to certify that their workforce is legal and impose penalties of up to $1 million and 10 years imprisonment if they lie on such reports” and “penalties of up to $5 million and 20 years imprisonment on company executives who hire illegal aliens.”
