Between Code and Customs: My Take on Trump’s Tariff Threat to India’s IT
I have spent much of my life watching systems—technological, economic, social—reach delicate tipping points. This recent flurry of headlines about possible US tariffs on services and the theatrics around trade advisers and social media has that familiar creaking feel: something is changing, and we have to listen before the floor gives way.
The reporting that brought this to the public eye captured the industry’s anxiety perfectly. The Times of India framed the fear around double taxation and visa tightening that could hit delivery models and margins hard Trump tariffs on India’s software exports?. The Economic Times added context about the scale of India’s dependence on the US market and how complex a duty on “digital labour flows” would be in practice IT Inc worries as US may slap tariffs on software exports - The Economic Times.
I want to walk through what is worrying me, why some of the fear is political theatre, and what the moment asks of India’s technology sector and its leaders.
What truly worries me
Double taxation is not a theoretical irritation; it is a real hit to margins and competitiveness. Indian firms already pay taxes in the US for economic presence, and an additional import duty would be an economic squeeze that bites at revenue and jobs. This was one of the chief concerns raised in the reporting Trump tariffs on India’s software exports?.
Visa tightening compounds the problem. If regulations force providers to move more delivery onshore in the US, costs will spike. The H‑1B and related regimes have already tightened; another layer of pressure would force an accelerated (and expensive) localization of talent.
Market concentration is a strategic vulnerability. Over 60% of India’s technology services revenue originates from the US. Geopolitics has a tendency to make markets volatile; dependence on one partner is a moral and economic hazard IT Inc worries as US may slap tariffs on software exports - The Economic Times.
The rhetoric is also part of a larger political frame. Public calls from advisers and commentators—like Peter Navarro’s viral posts that fanned talk of tariffs and which inflamed social-media debate—signal how individual actors can escalate trade narratives and stoke diplomatic unease Beyond Community Notes: Why Elon Musk and India critic Peter Navarro hate each other.
Why some of this is theatre — and why that matters
Not every noisy claim becomes policy. Implementing duties on digital labour flows is legally and technically fraught; tariffs are designed for goods crossing borders, not for services delivered remotely. Phil Fersht and other analysts have described much of the rhetoric as political theatre rather than immediate policy reality IT Inc worries as US may slap tariffs on software exports - The Economic Times.
That said, theatre affects markets and morale. Even talk of tariffs can slow hiring, delay contracts, and accelerate client hesitancy. Business decisions respond to perceived risk as much as to enacted law. So whether or not zeroed-in tariffs arrive, disruption may still result.
A thread of possibility: exemptions and negotiation
At the same time, the White House has offered mechanisms that create space for negotiation. Executive-level frameworks that condition exemptions on reciprocal agreements suggest that politics and diplomacy can still produce pragmatic outcomes US tariffs: Trump signs order granting exemptions; zero duties begin Monday for aligned partners.
This is crucial: if trade becomes a bargaining table rather than a blunt instrument, India’s negotiators and industry can secure carve-outs, thresholds, and definitions that preserve the essence of offshore services while addressing political pressures in the US.
What this moment asks of us — structurally and philosophically
I see three practical pathways and one deeper lesson:
Diversify, not because the US will vanish, but because markets with diminished correlation reduce existential risk. Explore Europe, Australia, Latin America, Middle East and expand productized IP exports that are less trade-exposed.
Accelerate strategic onshore presence where it matters. Build centers of excellence, joint R&D hubs, and hire locally for client-facing roles to reduce political friction while preserving delivery leverage in India.
Reimagine tax and corporate structures with tax advisors and diplomacy in mind: efficient repatriation, treaty utilization, and transparent accounting that diminishes the case for punitive measures.
Philosophically, this is a test of balance: how do we protect a country’s economic lifeblood—jobs, innovation, livelihoods—without retreating into a brittle nationalism that excludes global interdependence? Trade shocks require both resolve and humility. We must be ready to defend our interests firmly and to compromise pragmatically.
Final reflection
I am neither naive about the power of political rhetoric nor fatalistic about the outcome. There is a tension here between short-term political theatre and long-term structural realities. India’s IT story was written on the back of comparative advantage, scale, and patient institution-building. Those are not erased overnight.
Yet the moment demands leadership: from industry to government to diplomats. We must treat this not as a singular crisis but as a call to strengthen resilience—diversify markets, deepen capabilities, and keep channels of negotiation open. The other side of risk is opportunity; markets that learn to ride geopolitical tides gain strategic advantage.
If I have a final, quietly stubborn conviction, it is this: technology is human work, and human work travels in more ways than tariffs can measure. Our job is to make that travel steady, dignified, and fair.
Trump tariffs on India’s software exports? Why IT sector is worried - double taxation, visa tightening may deal a blow
IT Inc worries as US may slap tariffs on software exports - The Economic Times
Beyond Community Notes: Why Elon Musk and India critic Peter Navarro detest each other
US tariffs: Trump signs order granting exemptions; zero duties begin Monday for aligned partners
Regards,
Hemen Parekh