New Delhi: The Congress on Tuesday said a bill introduced in the US Senate proposing a 25 per cent tax on any American person making an outsourcing payment will “light a fire in the Indian economy” if it becomes a reality.
The opposition party said 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.”
Congress general secretary in charge of communications, Jairam Ramesh, made the remarks, referring to the Halting International Relocation of Employment Act, or HIRE Act Bill, introduced on October 6 by Senator Bernie Moreno of Ohio.
Ramesh said the bill could have a direct and significant impact on India’s IT services, BPO sector, consulting firms, and global capability centres (GCCs). While countries such as Ireland, Israel, and the Philippines may also be affected, India’s services exports, a major success story over the past 25 years, would face the greatest impact.
He noted that the bill, in its current form, may or may not pass and could undergo modifications. “It may just linger. But one thing is clear – the bill reflects a growing US mindset that while blue-collar jobs were ‘lost’ to China, white-collar jobs should not be ‘lost’ to India,” he said.
Ramesh added that nobody expected a year ago that the India-US economic relationship would face so many challenges, with the HIRE Act being the latest example. “If the HIRE Act becomes a reality, it will ignite a crisis in the Indian economy, which may have to adapt to a new normal in relation to the US,” he said.
The bill aims to curb outsourcing and promote domestic employment in the US by imposing a 25 per cent levy on payments made by American companies to foreign workers whose services benefit US consumers. Ramesh also shared a link to the provisions of the bill.
