Amid Tariff Threat to IT Outsourcing, Central Minister Reacts!

Amidst the fears of potential crackdown on outsourcing by Trump government, India is actively engaging with the US, global corporations and foreign governments to ensure that the technology industry, worth $300 billion, continues to thrive.

Union Minister for Railways, Electronics and IT Ashwini Vaishnaw said New Delhi is in “continuous engagement” with MNCs that operate global capability centres and large service operations in India. We are also engaging with the governments of US, Europe, Southeast Asia and Japan, to ensure that the IT industry, which provides high-quality employment, remains intact and grows.

Employment Generation

India’s IT services sector provides employment to a large number of people, over 5.67 million, and also contributes significantly to export revenues. The IT sector has been relying on overseas clients, particularly those in the US. The strict rules on issuance of visas and increased visa fee, along with the change in polices that could have an adverse effect on the IT industry have been putting pressure on the industry’s offshore delivery model.

However, Vaishnaw said that India is not solely dependent on export of services. It is simultaneously building domestic resilience through an aggressive push in electronics and manufacturing.

Country’s Resilience

The smart phone market share has increased and electronics manufacturing has also grown, he said. India is steadily localizing the supply chain bringing all electronic components to the country.

The government’s strategy of safeguarding existing IT employment and boosting domestic manufacturing is aimed at protecting jobs and increasing new  opportunities, he said.

More IT Jobs

The technology sector and software exports are expected to grow this fiscal. The IT sector is expected to add 1,26,000 jobs on a net basis, taking the total workforce to 5.8 million in fiscal year 2025, NASSCOM said. The IT industry’s total headcount rose to 5.67 million in 2024 from 5.58 million the previous year.

US President Donald Trump’s trade adviser Peter Navarro has stirred a debate on the $280 billion Indian IT outsourcing sector by suggesting tariffs on foreign remote workers, which could hit India’s biggest foreign exchange earners.