When Trump adviser Peter Navarro recently raised the idea of tariffs on outsourcing, India’s media immediately jumped in to attack it. The Hindustan Times mocked Americans for cheering it on, implying they didn’t understand the complexities of trade. To sound more authoritative, the paper leaned on the International Chamber of Commerce (ICC), quoting lines that painted tariffs on services as impossible for anyone who “really understands” global economics.
“Demands aside, it is actually tough to realistically tariff services. The International Chamber of Commerce notes that applying tariffs to services would not just be impractical, but it would also lead to legal, operational and economic risks … there is no clear moment when a service ‘enters’ a country, no global classification system comparable to the Harmonized System for goods and no consistent method to assess what should be taxed.”
The argument was dressed up to sound technical, but at its core it was propaganda. What is called “services exports” is not abstract trade, it is America’s jobs, America’s economy and America’s data. These are jobs that once belonged to Americans but have been siphoned overseas for the sake of corporate profit.
Unlike manufacturing, which requires massive investment in plants and machinery, these are positions that can be filled anywhere there is a computer and an internet connection. Americans have those tools. Businesses have them. There is no excuse for shipping this work abroad other than squeezing a wider profit margin. And while India defends outsourcing as untouchable, the truth is that it has become a massive chokehold on American workers, draining opportunity from families and communities across this country.
Thus, what India’s media organizations call “services exports” are not harmless numbers on a trade balance sheet; they represent real jobs, wages and data that should remain in America.
The Indian lobby behind the message
India has a long history of using global business chambers and trade groups to push its agenda.
The Confederation of Indian Industry (CII) and the National Association of Software and Service Companies (NASSCOM) frequently align with ICC India. CII has been a powerful force in shaping trade and industrial policy across sectors, while NASSCOM represents India’s IT and business process outsourcing (BPO) industries.
CII: Lobbying for issues related to outsourcing and work visas in the U.S.
The Confederation of Indian Industry (CII) and NASSCOM coordinate closely with ICC India to promote India as the “back office of the world.” NASSCOM itself has emphasized that in 2023, 89% of enterprises preferred outsourcing digital services to India, reflecting that country’s global dominance in service exports.
Indian influence inside the ICC has been longstanding. Indian lobby arms craft the talking points, the ICC provides the “global” stamp of legitimacy and Indian media outlets blast it out as fact.
ICC’s outsourcing playbook and India’s advantage
The International Chamber of Commerce has not only defended outsourcing in theory, but actively promoted it in practice. In 2018, the ICC released its Global Outsourcing Guide, a manual to help companies expand their outsourcing arrangements. The guide, produced by ICC’s Commission on Commercial Law and Practice, encouraged businesses to view outsourcing as a tool for “sound governance” and “proper risk management.” Its real purpose, however, was to neutralize the hesitation companies were beginning to show in the face of growing regulatory scrutiny.
Claim that tariffs on services would hurt U.S. competitiveness: false and insulting
The article “Trump’s Tariffs On IT Outsourcing: A High Cost Gamble” frames tariffs as reckless and “suicidal.” But when you dig into the arguments, it becomes clear that what’s really being defended is not American workers, but India’s outsourcing industry and the corporations invested in it.
“On the surface, it might seem like a win for American tech jobs, but reality shows it could backfire badly.” The claim that tariffs would hurt America more than India ignores reality. India’s IT sector is disproportionately dependent on the U.S., with more than 60% of its service exports flowing to American clients. If tariffs or restrictions were applied, India would feel the pain first and hardest. Suggesting the U.S. has more to lose flips the facts upside-down.
“Outsourcing is not about cheap labor, it’s about scale and speed.” This is one of the article’s most insulting claims. It suggests that Americans cannot deliver innovation or efficiency without Indian outsourcing. The reality is the opposite. The United States is still the world’s leader in technology, software and innovation. Framing outsourcing as essential for “scale and speed” is propaganda designed to undermine confidence in American workers and protect corporate profit models built on offshoring.
The wage gap makes this truth plain. The average salary for a U.S. IT professional is about $106,000 per year, compared to just $12,000 annually for an Indian IT worker. That disparity ends the argument in its tracks; this isn’t about innovation, it’s about cost-cutting at the expense of American jobs.
“Tariffs would hurt U.S. giants like Microsoft, Google and Accenture.” Of course they would, because these companies are among the biggest beneficiaries of outsourcing and have deep contracts and partnerships with India’s government and IT service providers. Their bottom line depends on cheap offshore labor, not on protecting American jobs. The fact that these firms would suffer is not proof that tariffs are bad policy; it’s proof they’ve tied themselves to a system that undermines U.S. workers.
But what that article doesn’t say is that these companies are not neutral bystanders. They are some of the largest offshoring entities in the world, with deep contracts, partnerships and investments tied to the Indian government. They gain from India’s outsourcing industry and would lose just as much if tariffs cut into its profits. Their defense of outsourcing is a defense of their own margins – not of American competitiveness.
“Any broad tariff on services is a tax on U.S. competitiveness.” That quote, attributed to an unnamed economist, is a perfect example of spin. What it really means is that tariffs would force companies to bring back costs they’ve been dodging by offshoring. Competitiveness should be measured by the strength of America’s workforce and economy, not by how much profit multinationals can squeeze out of cheap labor abroad.
“Policies that look worker friendly can do more harm than good.” This line exposes the heart of the argument, wherein protecting American workers is framed as a bad idea. That is exactly what India’s lobby wants Americans to believe, that fighting outsourcing will backfire. But history shows the opposite, that when America defends its labor force, its economy grows stronger, not weaker.
“Navarro’s advice should be taken as suicidal.” Labeling tariff discussions “suicidal” is fearmongering. What’s truly reckless is allowing the outsourcing pipeline to continue unchecked, draining jobs, data and capital out of the U.S. economy. The only players for which it’s remotely “suicidal” are the corporations dependent on India’s IT sector.
The real takeaway
This Indian “news” article does not present balanced analysis. Its talking points – that outsourcing is essential for “innovation,” that tariffs would cripple America and that defending workers is dangerous – are precisely the narratives pushed by Indian trade lobbies like CII and NASSCOM, echoed by global chambers like the ICC and amplified by corporate beneficiaries of cheap offshore labor.
Pushing false narratives: America cannot penalize outsourcing
The claim that tariffs on services are impractical has already been disproven. Governments tax and regulate digital flows every day. In the U.S., more than 30 states impose sales taxes on digital goods and services, enforced after the Supreme Court’s South Dakota v. Wayfair ruling. If states can track Netflix subscriptions, cloud services and app sales, then Washington, D.C. can track outsourced IT contracts and penalize them.
The United States has a long record of using the tax code to shape corporate behavior and that history makes clear that offshoring can be penalized. In 1976, Congress enacted Section 936 of the Internal Revenue Code, which tied tax credits to companies that kept operations in U.S. territories. The goal was to reward firms that invested at home rather than sending profits and jobs elsewhere.
These same systems could be adapted to monitor and regulate services imports. Moreover, the United States can implement excise-style taxes on imported digital services, offshoring penalties in the tax code, procurement restrictions requiring domestic sourcing and visa reforms to cut off the labor pipelines behind outsourcing.
Data is the choke point
The European Union has already provided a working model of enforcement. Through its Digital Services Act (DSA) and General Data Protection Regulation (GDPR), Europe has imposed strict rules requiring accountability for how data flows across borders. These frameworks have led to multi-billion-dollar fines against companies mishandling data.
If the United States adopted a similar U.S.-Digital Services Act requiring all citizen and business data to remain within U.S. jurisdiction, outsourcing contracts would be subject to audit. Companies transferring data abroad without authorization could face civil fines, license revocations and contract bans.
Since India’s outsourcing engine relies heavily on handling foreign data cheaply offshore, if America enacted data localization rules, an estimated 80% of India’s IT exports could be disrupted. This demonstrates that data sovereignty, not tariffs alone, may be the most powerful enforcement tool against rampant outsourcing.
India’s service exports depend on U.S. demand
Long before the latest debate over tariffs on outsourcing, experts were already warning about how deeply India depends on the U.S. market for its services. Economist Devashish Mitra noted that while the U.S. accounts for about 20% of India’s manufacturing exports, it buys more than 60% of India’s service exports. The gap is enormous, roughly $86 billion in goods versus $186 billion in services flowing to the American market.
That imbalance is where America’s real leverage lies. Tariffs on goods may sting, but restrictions on services would strike at the very center of India’s economic engine. In 2023-24, India’s IT services exports alone were worth more than $150 billion, helping drive total services exports to $341.11 billion. Keeping that flow alive is essential to India’s growth model. That is why Indian media, trade lobbies and groups like the ICC work in concert to push one message above all: Outsourcing must remain off-limits to tariffs or restrictions.
India will defend its service-export engine at any cost
With India’s outsourcing sector being its most lucrative export generator when U.S. voices begin challenging it, India responds with more than false economic narratives; it plays offense through politics and cultural identity. On Sept. 2, 2025, the HinduPACT’s American Hindus Against Defamation (AHAD) issued a formal demand for the dismissal of Peter Navarro from his post as director of the White House Office of Trade and Manufacturing Policy, accusing him of “promoting Hindu hate” for referencing caste. AHAD called Navarro’s comments “reckless provocation that endangers the dignity of over a billion Hindus” and warned it “threatens the foundational relationship between the two largest democracies.”
This is more than cultural/religious defense; it is an attempt to deploy brute political leverage. When policy discussions shift toward restricting visas or outsourcing, India’s machinery often paints American critics as discriminatory or insensitive – indeed it has a long history of doing so. Figures like White House Deputy Chief of Staff Stephen Miller have drawn headlines in India, standing accused of “cheating on immigration” and even igniting “H-1B visa tension” by tying skilled-worker programs to trade disputes.
The bottom line
When Indian media or commentators claim America “can’t tariff outsourcing,” it is not offering analysis, it is echoing straight-up propaganda. Indeed, that line comes from a decades-long lobbying machine linking India’s corporate associations, global chambers like the International Chamber of Commerce, and media outlets working in sync to shield India’s export model from scrutiny.
By repeating these talking points, outlets such as Hindustan Times spread the perception that America is powerless to stop outsourcing. The intent is clear: Convince Americans that the loss of jobs and data to overseas contractors is permanent and therefore untouchable.
The truth, however, is very different. America has the tools to act. Ending tax breaks that reward companies for sending work offshore, tightening procurement rules to ensure federal contracts stay domestic, creating a U.S. version of the Digital Services Act to keep American data at home and restricting the visa channels that fuel outsourcing are all concrete, immediately workable options.
Indeed, these are not distant ideas, they are proven policy levers. India’s lobbying machine insists outsourcing is beyond America’s reach precisely because it knows that once the United States chooses to act, the foundation of India’s service-export economy will be directly threatened. The only question is whether U.S. leaders will fight for the American worker or keep protecting India’s profits.
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