Overview
- Senator Bernie Moreno’s HIRE Act, introduced on October 6, is before the Senate Finance Committee and remains a proposal with uncertain prospects.
- The bill would impose a 25% excise tax on outsourcing payments to foreign entities, deny related tax deductions, and channel proceeds into a Domestic Workforce Fund.
- Definitions target payments for services that benefit U.S. consumers, with anti‑avoidance rules, stricter reporting, and steepened penalties outlined in the draft.
- If enacted, the tax could apply to payments made after December 31, 2025, potentially affecting a large share of India’s U.S.-dependent IT and BPO contracts.
- Raghuram Rajan calls the measure a bigger risk than the recent H‑1B fee increase, as Congress leader Jairam Ramesh warns of severe impacts on India’s IT, BPO, consulting and GCC sectors, even as observers expect debate and possible amendments.