Donald Trump is reportedly considering a significant clampdown on IT outsourcing to India. The topic gained momentum after Trump aide Laura Loomer publicly claimed, “President Trump is now considering blocking US IT companies from outsourcing their work to Indian companies. In other words, you don’t need to press 2 for English anymore. Make Call Centers American Again!”
While Loomer is not a formal White House policymaker, her influence with the “Make America Great Again” base has soared, escalating speculation over possible sweeping changes to longstanding US-India IT relations.
Current US-India IT Outsourcing Landscape
The US-India technology and business process outsourcing relationship is one of the cornerstones of India’s modern economy. American companies spend over USD 130 billion annually on outsourced IT and related services, with India commanding a massive share due to its scale, technical expertise, and cost-effectiveness.
In recent years, India’s IT and business process management (BPM) industry has evolved, specialising in enterprise-scale, AI, and complex software operations, serving top US multinational firms. The sector contributes over USD 60 billion in annual revenues directly from US clients and supports millions of jobs, both in technical development and customer care.
Cost savings still matter, but high-value work, flexible workforce models, and India’s ability to upskill in cutting-edge fields have kept the outsourcing trend strong. While other global destinations compete for call centres, India remains the strategic hub for complex IT, R&D, and end-to-end business processes.
The Trump factor: Why now?
This discussion is fuelled by more than classic “America First” rhetoric. In 2025, trade tensions between Washington and New Delhi have intensified, largely due to India’s economic and geopolitical decisions, from oil imports from Russia to strengthened partnerships with BRICS nations and a perceived tilt towards China. Trump recently imposed tariffs as high as 50% on certain Indian goods and services, criticizing India’s stance on international alignments and further straining the relationship.
The idea of “Make Call Centers American Again” resonates among US workers who see offshore outsourcing as a threat to local employment, a sentiment Trump and senior advisers like Peter Navarro have publicly echoed.
With activists suggesting new tariffs on all outsourced and remote work, and talk of punishing “foreign remote workers” to protect American jobs, there’s real bite behind the bluster. However, as of now, there is ambiguity about whether Trump would enforce direct bans, impose crippling tariffs, or simply encourage American companies to hire domestically through incentives and public pressure.
How would a ban affect Indian IT companies?
A US clampdown or ban on IT outsourcing would have seismic consequences for Indian IT majors—TCS, Infosys, Wipro, HCL, and a vast ecosystem of tech startups and call centres. Nearly two-thirds of India’s IT and BPM sector revenues come from the US market. A sudden blockage or sharp tariff increase would directly threaten client contracts, leading to potential job losses running into the hundreds of thousands, affecting not just urban workers but also employment across tier-2 and tier-3 Indian cities where these firms have grown.
Besides job losses, such a move would disrupt global supply chains, force Indian firms to upskill further or pivot to non-US markets, and dent investor sentiment in India’s prized technology sector. The knock-on effect could extend to billions of dollars in lost remittances, squeezed growth for ancillary businesses, and negative pressure on the rupee.
For the US, while “reshoring” IT and customer support work could boost domestic hiring in the short term, it would also mean higher operating costs for American companies, potential talent shortages, diminished service flexibility, and the risk of reciprocal retaliatory actions in trade and business.