Congress says US HIRE Bill could ‘light a fire’ in Indian economy if passed
New Delhi: The Congress on Tuesday said the proposed US legislation imposing a 25% tax on outsourcing payments could have far-reaching consequences for India’s economy, describing it as a move that would “light a fire in the Indian economy” if it becomes law.
Congress general secretary (communications) Jairam Ramesh made the remarks while referring to the Halting International Relocation of Employment (HIRE) Act, introduced in the US Senate on October 6 by Senator Bernie Moreno of Ohio. The bill has been sent to the Senate Committee on Finance for consideration.
The legislation seeks to impose a 25% tax on any American individual or company making payments to foreign entities for work benefiting US consumers. According to Ramesh, this would have a “direct and deep impact” on India’s IT services, BPO, consulting, and global capability centre (GCC) sectors.
“Other countries like Ireland, Israel, and the Philippines will also be affected, but the maximum impact will be on India’s services exports — a major success story over the past 25 years,” Ramesh noted.
He said the bill’s future remains uncertain — it could pass, be modified, or even stall indefinitely — but its introduction reflects a shifting sentiment in the US.
“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’,” Ramesh said.
He added that the India-US economic relationship has faced several setbacks in the past year, with the HIRE Bill being “another reflection” of this trend.
“If the HIRE Bill ever becomes reality, it will light a fire in the Indian economy, which may have to face a new normal in its economic ties with the US,” Ramesh warned.
The proposed law, he said, aims to discourage outsourcing and boost domestic employment in the US by taxing payments made to foreign workers. Ramesh also shared a link to the bill’s full provisions.
