A sudden tremor has unsettled the foundations of India’s most globalised industry. A bill introduced in the United States Senate proposes a steep levy on companies that send technology work overseas, while simultaneously stripping away the tax deductions that have long underpinned the economics of outsourcing. It may still be far from becoming law, but its political intent is unmistakable: to make it costlier for American firms to hire talent abroad rather than at home.

For India’s information technology sector, this is more than a passing headline. Over three decades, Indian firms have built a $283-billion export engine by supplying software and business services to some of the world’s largest corporations. That success rests on a delicate balance of cost, skill and trust. Even the suggestion of a 25 per cent outsourcing tax upends that balance, prompting American clients to seek price revisions, delay renewals and insert escape clauses into contracts.........

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