The matter starts with U.S. Senator Bernie Moreno. The man proposed a proposal called the Employment Act, with a clear goal: to make more money from companies that “prioritize hiring foreign workers rather than native American workers . “

How lethal is this proposal? I’ll settle the calculations for you. How big is the IT industry in India? $283 billion! This figure accounts for more than 7% of India’s total GDP. Apple, American Express, Cisco, and Citigroup, which we are familiar with, are all important customers of India’s IT services.

Some people may ask: Isn’t it just a 25% tax? Is it that serious?

I tell you, this is really serious. Experts predict that with federal, state and local taxes, the tax rate for outsourcing expenditures may be as high as 60%! Originally, an American company spent $1 million to outsource to India, but now it may have to pay an additional 600,000 in taxes. Who can stand this?

What’s even more serious is that the Indian IT industry is not having a good time. U.S. customers have begun to postpone non-essential technology spending due to inflationary pressures and tariff uncertainties. This is a bit worse for a second time.

The reason why the United States does this is actually not difficult to understand. They feel that too many jobs have flowed to India, affecting local employment .

The US government wants to use this method to allow companies to reconsider their employment strategies and leave more opportunities to local employees. The taxes collected must also be used for the cultivation of American labor, which can be said to be a strategy of killing two birds with one stone.

Over the past few decades, globalization has allowed all countries to play their comparative advantages. With its talent advantages and cost advantages, India has become an important supplier of IT services worldwide. American companies have also reduced operating costs and improved competitiveness. This was a win-win situation.

But now, this cooperation model is facing challenges . Trade protectionism is on the rise, and countries are beginning to consider their own interests more. This change not only affects the company, but also affects the lives of every ordinary person.

To be honest, there is little chance that this bill will be passed. Why? Because American companies themselves don’t want to do so . Think about it, if you suddenly have to pay an extra 25% tax, will those American companies that rely heavily on outsourcing be willing? I will definitely lobby against it.

Experts predict that the most likely result is that the bill’s content is weakened and the implementation time is delayed . Politicians always have to behave like a show. If you really hurt your muscles, that’s another matter.

However, this incident has sounded a wake-up call for the Indian IT industry. The time for customers to sign the contract will be longer, the renewal cycle will be extended, and the funds invested in transformation will be later . India must consider how to reduce its dependence on the US market.