After levying steep tariffs on Indian goods, the US administration under President Donald Trump is now signaling a possible crackdown on India’s prized IT services sector. Proposals under discussion include tariffs on remote IT workers, higher levies on remittances, and further restrictions on the H-1B visa program—a cornerstone for Indian tech firms.
IT Services in the Crosshairs
Conservative voices in the US have begun calling for tariffs on outsourcing, arguing that foreign workers providing services remotely should be taxed like imported goods. Senior White House trade advisor Peter Navarro reposted such views, lending credibility to the possibility of policy action. If implemented, the tariffs could dramatically raise the cost of outsourcing, affecting Infosys, TCS, Wipro, HCL, and Cognizant.
Ripple Effects on India’s Economy
India’s IT services industry, valued at hundreds of billions of dollars, is one of the country’s strongest export engines and a key driver of its global standing. Tariffs on IT services would not only disrupt outsourcing contracts but also increase project costs for US firms that rely heavily on Indian talent. The outcome could erode margins, disrupt delivery schedules, and trigger a rethink of long-standing business models.
H-1B and Remittance Concerns
The US is also tightening visa rules and increasing taxes on remittances. With nearly 28% of India’s remittances coming from the US, any levy could have severe consequences for families and India’s foreign exchange reserves. H-1B restrictions, meanwhile, threaten to curb on-site opportunities for Indian engineers and weaken client relationships in the US.
A Strain on Bilateral Ties
If these measures materialize, they could deepen economic friction between Washington and New Delhi. For India, the stakes are enormous—its IT workforce is one of its greatest global exports, fueling both job creation at home and digital transformation abroad. For the US, curbing this talent flow may lead to higher costs and slower innovation.
