Even as the ongoing tariff dispute between the United States and India remains unresolved, recent public remarks by U.S. President Donald Trump have added an unexpectedly aggressive new layer to the friction. Speaking at an AI Summit in Washington, D.C. on July 23, 2025—an event where he also signed a trio of executive orders on AI governance and national competitiveness—Trump veered into politically loaded territory. “Many of our largest tech companies have reaped the blessings of American freedom while building their factories in China, hiring workers in India and stashing profits in Ireland… Those days are over,” he said. Addressing Silicon Valley more directly, he added: “We need US technology companies to be all in for America. We want you to put America first. You have to do that.”
These remarks, pointedly aimed at corporate behemoths like Microsoft and Google, were not accompanied by any direct legal order. Yet they have caused considerable ripples across both American boardrooms and Indian policy circles. While no formal executive action or legislation has yet prohibited hiring from India or outsourcing work to Indian technology hubs, the tone and timing of Trump’s warning suggest the possibility of administrative action through more subtle levers: visa policy tightening, changes to federal contractor rules, or trade measures targeting the tech services industry.
Legal Levers: What Can Trump Actually Do?
Although President Trump’s comments were not backed by a specific policy ban, the White House does possess tools that could indirectly compel companies to shift hiring patterns. First, visa categories like H-1B and L-1, which Indian tech professionals overwhelmingly utilise, can be made subject to stricter eligibility criteria, wage thresholds, and site inspections. Deportations and travel restrictions on visa holders have already increased in recent months, reinforcing the administration’s stance.
Second, Trump could issue executive orders conditioning federal technology contracts on compliance with ‘Hire American’ provisions—effectively penalising companies that rely too heavily on offshore talent. Such federal procurement rules would not amount to an outright ban on hiring Indians, but could deter companies from pursuing traditional outsourcing models if they wish to retain access to federal business.
Third, Trump has consistently used tariffs as an instrument of economic coercion, and there remains the possibility—however legally fraught—of invoking punitive tariffs against digital services imported from India, or software development performed offshore. While such a move would face significant challenge under World Trade Organization rules and U.S. trade law, the threat itself could exert pressure on corporate hiring and offshoring decisions.
What’s clear is that while the legal groundwork for a direct ban is either absent or highly contestable, the U.S. executive branch does hold sufficient regulatory tools to create a chilling effect on Indian talent mobility and services exports.
Implications for India and Indian IT
India, which supplies the bulk of the global IT workforce and maintains a vibrant tech services sector, is likely to feel the tremors of Trump’s latest salvo in multiple ways. First, the most immediate concern is uncertainty around visas. With the U.S. ramping up scrutiny, many Indian tech employees on H-1B or L-1 visas may face heightened restrictions, including longer processing times, possible rejections, and advisories against international travel.
Second, the well-established model of global capability centres (GCCs) in India may come under stress. Multinational corporations have historically used Indian tech campuses to scale efficiently. However, political pushback from Washington could lead firms to rebalance their delivery models, shifting some operations to onshore or near-shore destinations such as Canada or Mexico, while keeping only critical back-end functions in India.
Third, Trump’s remarks appear deliberately timed to coincide with the final stages of a renewed U.S.-India trade negotiation. With a fresh tariff deadline of August 1 looming, and trade talks delicately poised, the rhetoric on Indian hiring may be part of a broader negotiation strategy—linking labour mobility, AI competitiveness, and tariff concessions into a single complex package.
Indian Government and Industry Reactions
As of now, the Indian government has not issued a formal response to Trump’s remarks. The Ministry of External Affairs has limited its public comments to the broader status of trade negotiations, while the Commerce Ministry under Piyush Goyal has struck an optimistic tone, saying the discussions are proceeding “fantastically.” On the specific question of tech hiring and outsourcing, however, there has been a noticeable silence from both government and industry.
From the Indian corporate side, leading bodies such as NASSCOM have not yet issued formal statements on the hiring controversy, though they continue to underline the value of the U.S.-India technology corridor and recently backed initiatives like the US-India CEO Forum. Meanwhile, companies like Google and Microsoft have so far refrained from commenting on the president’s warnings, likely calculating that silence may be a safer strategy amidst election-year political headwinds.
Navigating a Complex Future: India’s Strategic Options
India must now navigate a complex and fluid landscape—where policy, politics, and perception are deeply intertwined. The first imperative is diplomatic: securing a quick resolution to the U.S.-India tariff dispute through a “mini deal” that not only prevents tariff escalation but includes provisions for talent mobility. A mutually beneficial “Talent and Innovation Corridor” could ease American concerns while safeguarding Indian tech employment.
Equally crucial is the communication strategy. India must make its case in Washington, not merely through government-to-government channels, but by mobilising U.S. state governors, Congressional allies, and corporate beneficiaries of Indian talent. It is important to showcase how Indian engineers help American companies compete globally, create onshore jobs, and contribute to innovation ecosystems.
India must also prepare to contest any discriminatory trade measures at the WTO, and examine options under bilateral investment treaties if Indian service providers are unfairly targeted. On the domestic front, firms should begin diversifying delivery models, investing in AI-driven productivity, and pursuing geographic de-risking through newer markets in the EU, ASEAN, the Middle East, and Africa.
For individual professionals, visa diversification, remote work strategies, and compliance discipline will become increasingly important. The evolving terrain calls for vigilance, adaptability, and a unified policy-industry response that blends strategic patience with proactive diplomacy.
In summary: Pro-India, Not Anti-America
President Trump’s rhetoric, while unsettling, must be understood as part of a broader domestic political agenda. His administration is attempting to recast the global technology landscape in nationalistic terms, demanding “patriotism and national loyalty” from Silicon Valley. For India, the task is to defend its legitimate interests without falling into a confrontation trap. India should present its case assertively yet diplomatically—affirming that the U.S.-India tech partnership is not a one-way street, but a dynamic, mutually enriching relationship that contributes to both economies.India respects America’s right to prioritise its workforce. But it must also assert its own stake in a global digital economy—where talent flows are essential, innovation is borderless, and shared prosperity depends on cooperation, not coercion.
About the Author
Karan Bir Singh Sidhu is a retired Indian Administrative Service officer with nearly four decades of public service, including as Special Chief Secretary, Punjab. He writes at the intersection of global technology, international human resource mobility, and tariff and non-tariff barriers to trade