How realistic is this? Tariffs on indian IT services and tech workers? What would happen the US consulting model? https://www.indiatoday.in/amp/world/us-news/story/is-donald-trump-trying-punish-india-it-services-exports-after-taxing-trade-tariff-peter-navarro-h1b-new-visa-policy-2781264-2025-09-03
I have been saying this since the tariffs started. Don't tariff goods that hurt every day consumers. Tariff the off shored labor that is costing American jobs and the only one who pays for it are furtive 500 companies that can afford the increased price for staffing US resources.
The buyers of the services pay the tariffs. If you buy a banana that banana is going to cost you more if it has tariffs on it. No one is missing this concept.
In labor resources the buyer of those off shored resources pay more for them. Which makes it less appealing and more appealing to pay the same on shore.
And yes those companies could be greedy and pass those costs to their end customers but I am saying they have the profit margin to afford this and should not.
Chief
You mean tariff on Google, Amazon, nvidia , every major bank, Microsoft, meta, Apple GE , Boeing , ford and some other non consequential companies ? Or maybe IRS, US defense, state department and homeland security and several state level agencies? And the same tax that , again, will be paid by American citizens ?
Sounds like a digital sales tax on American companies that the Europeans want and this administration really hate . Can they be really this dumb to apply it on themselves? Sure, go for it.
This. There are other low cost high educated labor pools and companies will adjust.
If India wants to fk around then they’ll find out. They’re helping to fund Russias war in Ukraine and don’t want fair trade.
Chief
Every consulting firm and IT firm uses India delivery centers.
Every?
Accounting Firms also outsource, upskilling other nations.
Chief
Renegotiated contracts with clients to pass the higher costs on, which will ultimately mean less work because the client didn't budget enough for 100% onshore teams.
As soon as it could happen, you'd probably see a shift from India to other lower cost areas such as LATAM.
There will be counter tariffs on US giants Google, MSFT, meta, open ai.. US has much more trade than India in software
EY1… maybe use data to inform your opinion.
India exports 224B annually in IT services and 140B goes to the US so they have significant 60% concentration and high exposure risk to US tariffs. The US exports less than 100B in IT services and only 15B go to India.
India is the world‘s largest IT services exporter by far and makes up a huge portion of their economy, most of it reliant on the US market. This gives the US a lot of leverage in negotiations. Given the fact that India’s average tariff rate on US goods was over 12% and the US average on Indian goods was over 2%, there should be no surprise that Trump would target India for renegotiation.
EM1 - apply common sense, do some search, there are plenty of tools available nowadays and figure out the trade deficit in software and services export
They’ll just ramp up other offshore/nearshore delivery centres.
Bringing those jobs back to US at US rates doesn’t seem tenable.
Ok, so for all those against these tariffs. What are other methods to keep on shore jobs in tech? or are we just throwing in the towel and suggesting we pivot to other skills?
Doubt it. People will just expect more output in shorter time.
Consultants will add the additional cost to Client. Client will shift the cost to their customer (hike the price of the product or services) or reduce the headcount in US to match. Net to net, it’s paid by the common people in US.