'Growing mindset in US that white-collar jobs shouldn't be lost to India': Jairam Ramesh on HIRE Act

 

Congress leader Jairam Ramesh on Tuesday raised concern over the Halting International Relocation of Employment Act or HIRE Act, introduced in the US Senate. He said the proposed law could seriously affect India’s IT and services sectors.

In a post on X, Ramesh said the HIRE Act shows a growing view in the US that white-collar jobs should not be “lost” to India, just as blue-collar jobs were “lost” to China. If passed, the Bill could lead to job losses in India’s IT sector and affect the Indian economy at large, Ramesh warned. 

“The Bill in its present form may or may not pass. It may get modified. It may just linger. But one thing is clear, the Bill reflects a growing mindset in the US that while blue-collar jobs were ‘lost’ to China, white-collar jobs should not be ‘lost to India,’” he wrote.

He wrote, “On Oct 6, 2025, Senator Bernie Moreno of Ohio introduced a Bill in the US Senate titled ‘Halting International Relocation of Employment Act’ or ‘HIRE Act’. The Bill has been referred to the Senate Committee on Finance.”

"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,'" he added.

He warned that the fast-growing IT industry could face a major setback if the Bill becomes law. He said the Bill “has a direct and deep impact on India’s IT services, BPO, consulting, and GCCs (global capability centres).”

“Other countries like Ireland, Israel, and Philippines too will be impacted but the maximum effect will be on India's exports of services which has been a marked success story over the past quarter of a century,” he added.

Concluding his post, Ramesh said, “If ever HIRE becomes a reality, it will light a fire in the Indian economy which may have to face a new normal in relation to the US.”

 

 

 

 

 

 

 

 

Key points about the HIRE Act

The HIRE Act, introduced by Senator Bernie Moreno, aims to impose a 25% tax on outsourcing payments made by US taxpayers to foreign persons for services that benefit American consumers.

The Bill proposes to amend the Internal Revenue Code of 1986 to include an excise tax on outsourcing payments, such as “any premium, fee, royalty, service charge, or other payment made in the course of a trade or business to a foreign person with respect to labour or services that benefit consumers located in the United States.”

The 25% tax will apply to any US person making such payments, but companies or partnerships registered under US possession laws will not be treated as “foreign persons.”

To stop tax evasion, the Bill directs the US Secretary of the Treasury to issue rules against related-party transactions and transfer pricing practices. Failure to pay or report the outsourcing tax will attract strict penalties, including a 50% penalty rate for repeat offences.

Additionally, the Bill seeks to deny US businesses tax deductions for outsourcing payments by preventing such claims under Section 280I of the Internal Revenue Code. If passed, the amendments and tax measures under the HIRE Act will apply to payments made after December 31, 2025.