HIRE Act 2025 Threatens Pune’s Hinjewadi IT Hub as US Outsourcing Tax Looms

The HIRE Act 2025 proposal in the US could impose a 25% tax on outsourced work, posing a major risk to India’s $283 billion IT sector—especially for hubs like Pune’s Hinjewadi.

Pune, October 28, 2025 – A major concern has surfaced in India’s IT industry after the United States proposed the HIRE Act 2025, which aims to impose a 25 percent tax on companies outsourcing jobs to other countries. The bill, if passed, could severely affect India’s $283 billion IT sector and hubs like Pune’s Hinjewadi IT Park, where thousands of professionals work for companies serving American clients.

The bill, known as the Hiring International Relocation of Employment (HIRE) Act, was introduced by US Senator Bernie Moreno from Ohio. It proposes that any American company sending jobs overseas should pay a 25 percent outsourcing tax from January 1, 2026. The collected tax would be used to support domestic employment and strengthen the American middle class.

Industry experts warn that this move could make outsourcing significantly more expensive for US companies. The cost of sending work abroad could increase by up to 60 percent, leading many firms to reconsider their outsourcing contracts. For Indian IT companies, especially those heavily dependent on US projects, this could mean a sharp decline in new assignments and revenue.

The United States currently accounts for more than 60 percent of India’s IT export revenue. Cities like Pune, Bengaluru, Hyderabad, and Chennai are home to major IT parks that rely heavily on American business. In Pune, Hinjewadi IT Park houses several multinational firms whose operations could be hit hard if outsourcing becomes less profitable for US clients.

If the legislation is approved, Indian IT companies may have to revise their strategies to maintain competitiveness. This could include investing more in automation, offering higher-value digital solutions, and diversifying into markets such as Europe, the Middle East, and Southeast Asia. Some experts also suggest that companies might increase local hiring in the US to maintain client relationships and avoid the outsourcing tax.

While the HIRE Act is intended to protect American jobs, it has caused deep concern among Indian industry bodies and policymakers. Analysts say the move could disrupt cross-border business relationships and slow the growth of India’s export-driven IT sector.

In response, Indian trade associations and government representatives are expected to engage with US counterparts to explain how outsourcing has been mutually beneficial over the years. Many believe that collaborative discussions may help soften the proposed terms or delay its implementation.

For now, the mood in Pune’s IT corridors is one of uncertainty. Employees and firms alike are watching the situation closely, aware that the US remains their largest client market. The next few months will be crucial in determining how the industry adapts to a new outsourcing landscape if the HIRE Act 2025 becomes law.

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