Archive · 2 Nov 2025
Raghuram Rajan Warns U.S. HIRE Act Poses Greater Threat Than H-1B Fee Hike
A former governor of India's central bank, Raghuram Rajan, is worried about a new law being discussed in the U.S. called the HIRE Act.
He thinks this law, which might put extra taxes (tariffs) on services that companies send to other countries (like IT work from India), could hurt India more than the recent big increase in fees for H-1B work visas.
He says that while the visa fee hike will cause some problems for Indian workers and companies for a while, the tariffs on services could be a much bigger, long-term issue.
India has already seen some tariffs on its goods, like textiles, and Rajan believes it's very important for India to negotiate lower tariffs.
He also mentioned that companies might start hiring more people in India directly or hire foreign students who study in the U.S. instead of sending workers on H-1B visas, which could change how businesses operate.
Raghuram Rajan warns the U.S. HIRE Act, proposing tariffs on outsourced services, is a greater concern for India than the H-1B visa fee hike.
The HIRE Act could have a more significant and lasting impact on India's service exports and global talent pipeline.
Rajan noted that India already faces significant U.S. tariffs, particularly affecting industries like textiles.
He suggested that companies might adapt to H-1B visa changes by hiring more in India or recruiting foreign students educated in the U.S.
India needs to push for lower tariff levels during ongoing negotiations, especially for labor-intensive industries.
- Who
- Former RBI Governor Raghuram Rajan
- What
- Warned that the U.S. HIRE Act, proposing tariffs on outsourced services, is a greater threat to India than the recent H-1B visa fee hike.
- When
- Recently, during an interview with DeKoder.
- Where
- United States Congress and India's service exports.
- Why
- To highlight the potential for the HIRE Act to permanently disrupt India's service exports and global talent pipeline, which could have a more lasting impact than the H-1B visa fee increase.
- Proposed U.S. Legislation
- HIRE Act (Help In-sourcing and Repatriating Employment)
- Primary Concern for India
- Potential tariffs on outsourced services
- Impact of H-1B Fee Hike
- Short-term disruptions, potentially less severe than feared
- Existing Tariffs on India
- Record 50%
- Affected Indian Industries
- Textiles, services
