In an era of rising economic nationalism, business strategy is no longer merely about markets and margins. It is increasingly about how countries redefine alliances, impose tariffs and restrict immigration—and how companies respond to balance risk with reward. At the heart of this recalibration lies talent: where it is deployed, how it is nurtured, and whether it can transcend borders. For Indian companies—especially in the technology sector—the impact of tariff-like barriers and labour mobility constraints is being felt with renewed intensity.
America’s recent tariff impositions, targeting primarily Chinese goods but cascading through global supply chains, pose particular challenges for India’s technology sector. The industry has long relied on the ability to move talent seamlessly across borders, especially to America. Whilst specific impacts remain difficult to quantify precisely, industry observers note that restrictions on cross-border movement inevitably affect project staffing, delivery models and career opportunities for technology professionals.
“This sort of thing happens periodically within countries,” observes Ramesh Shankar, a seasoned HR leader and former CHRO of a German multinational technology conglomerate, Siemens. However, the current wave of tariff impositions—particularly by the US—is unique in scale and intent. These tariffs, while primarily aimed at countries such as China, invariably affect global supply chains that extend into India.
Shankar emphasises the dual nature of this scenario. High tariffs on sectors such as automotive imports can negatively impact Indian IT firms providing services in those domains, potentially forcing them to relocate work to lower-cost geographies. Yet this disruption creates opportunities: “For instance, all iPhone manufacturing and component sourcing may now shift to India due to high tariffs on China.” For Indian companies, especially those in IT and manufacturing support, this represents an unprecedented chance to absorb new business and move up the value chain.
Resilience rebooted
Indian IT companies have always navigated global complexities with resilience—from Y2K to Brexit, and now to the emerging wave of economic nationalism. In response to recent developments in global trade policy that mirror tariff-like restrictions on service exports, firms are returning to a familiar playbook: localise, optimise and diversify.
“These constraints could, paradoxically, open doors—by pushing Indian IT firms to explore new geographies and rewire delivery models for long-term sustainability.”
R Venkattesh, former president, DCB Bank
The cost implications are being carefully distributed across three vectors: enhanced internal efficiencies through automation, marginal impact absorbed by operating margins, and in some cases, passing a portion of costs to clients.
R Venkattesh, former president, DCB Bank, believes this is not necessarily a crisis. “These constraints could, paradoxically, open doors—by pushing Indian IT firms to explore new geographies and rewire delivery models for long-term sustainability,” he reflects. Furthermore, upcoming trade agreements with friendly economies could offer fresh opportunities to rebalance global delivery risks.
“Companies will have to decide which jobs to shift where. Sometimes work will come back to India; other times it may be pushed to America itself.”
Ramesh Shankar, senior HR leader
The US tariff policies create ripple effects that extend well beyond direct trade. When tariffs increase manufacturing costs for American clients, their technology budgets often shrink in response, creating downward pressure on billing rates and staffing allocations. This has prompted HR departments across India’s tech corridor to develop alternative career paths that don’t rely exclusively on the US market exposure, with many firms creating specialised technical tracks focused on emerging markets in Southeast Asia and Africa to deliberately diversify career progression options.
From global pipelines to domestic benches
But what does this mean for talent in an industry where international assignments are often the crown jewel of career progression? Tariff constraints and immigration restrictions are already reducing international mobility. As a result, Indian firms are grappling with the challenge of managing larger onsite benches—employees hired with the anticipation of international deployment but now waiting in limbo.
“Historically, this happens,” says Adil Malia, CEO, The Firm. “Like during the Gulf War, assignments from that region slowed, and similar adjustments had to be made.” Today, regions such as Russia and Ukraine are out of reach, while others may be opening up. For HR leaders, the question becomes how to balance bench strength without eroding employee morale or engagement.
Venkattesh adds nuance to this challenge. While bench strength can often be absorbed against natural attrition, the psychological uncertainty it creates is real. “These changes do bring a certain amount of uncertainty, impacting morale and engagement,” he explains. This is where HR must lean in with high-touch strategies: frequent communication, transparent updates, upskilling interventions and a nurturing culture that prioritises long-term career development amid short-term setbacks.
Bodyshopping 2.0
A particularly seismic shift lies in the traditional “bodyshopping” model—the practice of deploying Indian professionals to client locations abroad. With tighter immigration rules and evolving protectionist policies, this approach is under threat. Venkattesh points out that while the full impact is still unfolding, companies are experimenting with alternative workforce models.
Remote work, gig contracts and hybrid delivery setups that blend onshore, offshore and nearshore resources are becoming the norm. In fact, establishing local units with local hires in international markets is proving to be a smart hedge—reducing visa dependencies while building regional trust. “A mix of local incorporation, local hiring, and a reduced need for international deployment seems to be the way forward,” admits Venkattesh.
Shankar concurs: “Companies will have to decide which jobs to shift where. Sometimes work will come back to India; other times it may be pushed to America itself.” The key, he says, is to maintain a dynamic outsourcing policy that allows for constant realignment without compromising service quality or cost efficiency.
Global mindset, local workforce
Multinational corporations, accustomed to policy volatility across borders, are turning current constraints into opportunities for long-term workforce planning. Many had already invested in localisation initiatives, building robust talent pipelines in host countries. The focus now is on intensifying these efforts through training and skills development.
Venkattesh notes that successful multinationals embed flexibility in their strategies: “It’s not just about reacting to change; it’s about building institutional muscle to anticipate and absorb it.” From investing in internal mobility programmes to skilling local talent pools in niche technologies, these companies ensure business continuity without over-relying on transnational staffing.
The way forward lies in strategic workforce planning. From training employees in region-specific compliance to virtually onboarding globally distributed teams, companies are modernising how they integrate talent into global delivery systems. Venkattesh likens it to water finding its way: “There will be minimal and gradual changes rather than a quantum shift in workforce models.”
Reimagining the domestic landscape
The consequences of American tariff policies are reshaping India’s domestic talent landscape as well. With more highly skilled professionals remaining in India rather than taking international postings, employers report changes in local hiring patterns and compensation structures. Industry consultants observe that this shift has contributed to increased competition for senior talent, particularly in specialized roles that would typically involve international exposure.
Corporate HR policies are undergoing fundamental restructuring. Traditional global mobility teams are being replaced with “borderless work enablement” units that focus less on facilitating physical relocation and more on creating technologically enabled collaborative environments where teams can work effectively across geographies without relocating. This shift requires significant investment in digital infrastructure but offers substantial long-term savings compared with the traditional model of sending large contingents of workers abroad.
In the final analysis, the story of tariffs is not just about cost and compliance. It’s about people—the software engineer who had packed for an onsite role that got delayed, or the project manager navigating global expectations from a cubicle in Bangalore. As Malia rightly points out, “Just like countries have to manage opportunities and threats, organisations have to find a similar equilibrium.”
For Indian IT firms and their leaders, the challenge lies not just in responding to tariffs but in humanising their response—ensuring that no employee feels stranded as the global currents shift. In an era of uncertainty, the strongest anchor is not strategy alone, but empathy backed by agility.
As policy experts acknowledge, American tariff policies may ultimately accelerate India’s trajectory toward becoming a self-sufficient technology powerhouse rather than primarily a service provider. With companies now investing more in domestic innovation centres and advanced research facilities that were previously concentrated in Silicon Valley, the possibility emerges that today’s tariff walls could become tomorrow’s foundation for India’s technological sovereignty.