Business
Trump tariffs on India’s software exports? Why IT sector is worried – double taxation, visa tightening may deal a blow – The Times of India
India’s IT sector is worried about the possible imposition of tariffs on software exports to the US by the Donald Trump administration. The IT sector is already experiencing challenges due to worldwide economic uncertainties and the increasing adoption of AI-based automation, according to industry specialists.The US government’s potential consideration of extending tariffs to software exports has created significant concern within India’s information technology industry, as this could severely impact their operations in their main market.
Trump tariff fears: Why is Indian IT sector worried?
The implementation of tariffs on services exports by the US administration could result in dual taxation, as Indian software companies already contribute substantial tax payments in the United States, according to an ET report.Additional restrictions on visa regulations might lead to increased operational costs due to necessary local recruitment in the US or neighbouring regions.
Tech in trouble?
The Indian technology services outsourcing sector, valued at $283 billion and including companies such as Tata Consultancy Services, Infosys, HCLTech and Wipro, derives over 60% of its earnings from the United States, whilst maintaining its primary workforce in India.However, the US administration has not yet formally announced or indicated any such intentions. Concerns arose after Peter Navarro, the US President’s senior advisor for trade, shared a social media post on X suggesting the application of tariffs on all outsourcing and foreign remote workers.A US conservative commentator Jack Posobiec posted: “Countries must pay for the privilege of providing services remotely to the US the same way as goods. Apply across industries, levelled as necessary per country.”Such implementation would affect all technology service recipients who utilise services from India and similar nations.
Will Trump impose tariffs on IT?
Phil Fersht, CEO and chief analyst at HFS group, suggests that discussions about tariffs on India’s outsourcing sector represent more political messaging than actual policy intentions. Nevertheless, any outsourcing penalties would generate immediate uncertainty, increase operational costs and affect profit margins during an already challenging demand period, the ET report said.“Imposing duties on digital labour flows is far more complex than taxing goods crossing borders. The US depends heavily on India’s IT and engineering talent, whether onsite through H-1B visas or offshore through remote delivery, to keep its own technology economy competitive,” Fersht said.“In addition, several tech billionaire leaders exert significant influence over the Trump administration, and many of them are strongly pro-India because their global businesses depend heavily on Indian engineering talent, delivery capability and market access.”Yugal Joshi, partner at US-based technology consultancy and analyst firm Everest Group, was quoted as saying: “These companies pay significant taxes in the US and therefore, the tariff will be double taxation… It will further harm growth of India-based service providers and even GCCs, if they are tariffed too.”
Tata Motors Vehicles Price In India: Tata Motors on Sunday announced that it will pass on the entire benefit of the recent GST rate cut to its commercial vehicle customers. The new prices will be effective from September 22, the day the revised GST rates come into force.
“Tata Motors will pass on the full benefit of the recent GST reduction on its entire commercial vehicle range to customers, effective September 22, the date the revised GST rates come into effect,” the company said in a statement.
The price cuts will vary across different vehicle categories. Heavy commercial vehicles (HCVs) will see a reduction ranging between Rs 2.8 lakh and Rs 4.65 lakh. Intermediate, light, and medium commercial vehicles (ILMCVs) will become cheaper by Rs 1 lakh to Rs 3 lakh.
Buses and vans will see reductions between Rs 1.2 lakh and Rs 4.35 lakh. Small commercial passenger vehicles (SCVs) will get price cuts between Rs 52,000 and Rs 66,000, while SCVs and pickups will become cheaper by Rs 30,000 to Rs 1.1 lakh. The company said the GST on commercial vehicles has been reduced to 18 per cent, a move that it believes will help revive India’s transport and logistics sector.
Girish Wagh, Executive Director of Tata Motors, said the decision reflects the government’s commitment to strengthening the country’s economic backbone. He added that Tata Motors is proud to extend the full GST benefit to customers, ensuring lower costs and better access to modern vehicles.
Tata Motors highlighted that commercial vehicles play a crucial role in India’s growth by driving logistics, trade, and connectivity. With the GST reduction, the company expects the total cost of ownership for transporters, fleet operators, and small businesses to come down.
This will encourage faster fleet modernisation and wider adoption of advanced, cleaner mobility solutions, helping operators cut costs, improve efficiency, and boost profits. The company has also encouraged customers to book vehicles early to take advantage of the reduced prices during the upcoming festive season.
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New Delhi: Joining other automakers in reducing prices, Mahindra & Mahindra Ltd (M&M) on Saturday announced to fully pass on the GST 2.0 benefits to customers across its ICE SUV portfolio — up to Rs 1.56 lakh — with an immediate effect.
According to the company, models like Thar, Scorpio, Bolero, XUV700, and Scorpio-N will be available with substantial savings ranging from Rs 1.01 lakh to Rs 1.56 lakh. Bolero and Bolero Neo are cheaper by up to Rs 1.27 lakh, while the XUV3XO Petrol gets a cut of Rs 1.40 lakh, and the XUV3XO Diesel leads with a reduction of Rs 1.56 lakh.
The Scorpio-N offers savings of up to Rs 1.45 lakh, the Thar Roxx Rs 1.33 lakh, and the flagship XUV700 RS 1.43 lakh. Toyota Kirloskar Motor (TKM) also announced it will fully pass on the benefits of the recent GST rate reduction to its customers across its range of vehicles — ranging from Rs 48,700 (Rumion) up to Rs 3.49 lakh (Fortuner).
“We sincerely thank the government of India, for this historic reform. It has not only enhanced affordability for customers but also strengthened overall confidence in the auto sector. Ahead of the festive season we expect this step will provide strong momentum and further accelerate demand,” said Varinder Wadhwa, Vice President, Sales-Service-Used Car Business and Profit Enhancement.
While Toyota Glanza will see price cuts up to Rs 85,300, Taisor will see price reduction up to Rs 1,11,100; Hyryder up to Rs 65,400; and Fortuner up to Rs 3,49,000.
Renault India also announced a significant price reduction for its cars on Saturday. Prices of its three models — Kwid, Triber and Kiger — have been slashed by up to Rs 96,395. Under the new GST 2.0 framework, all internal combustion engine (ICE) cars are now taxed at either 18 per cent or 40 per cent.
Smaller cars such as hatchbacks, compact sedans, and compact SUVs fall under the 18 per cent slab, while mid-size, larger, and luxury models attract 40 per cent. Previously, ICE vehicles were subject to 28 per cent GST plus an additional compensation cess ranging between 1 per cent and 22 per cent depending on size and engine capacity.
For electric vehicles, the GST rate remains unchanged at 5 per cent, while hydrogen fuel cell vehicles (FCEVs) have seen a reduction from 12 per cent to 5 per cent.
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