Overview
- The Senate bill, introduced by Ohio Sen. Bernie Moreno, would levy a 25% excise tax on “outsourcing payments” for services benefiting U.S. consumers.
- The measure would also deny tax deductions for such expenses, channel receipts to a Domestic Workforce Fund, and tighten reporting obligations and penalties.
- Former RBI governor Raghuram Rajan warns the plan is a bigger risk to India than the new H‑1B fee, as it effectively taxes cross‑border services.
- Congress leader Jairam Ramesh cautions of a direct and deep hit to India’s IT, BPO, consulting and GCCs, urging the issue be raised in trade negotiations.
- Analysts note the U.S. accounts for about $45 billion of India’s services exports and say any tax could pressure margins and new contracts even if reshoring proves difficult.