This article examines the impacts of Trump 2.0 policies on India’s services industry, which constitutes a critical pillar of the Indian economy. Given that the United States is India’s primary services market, recent Trump 2.0 policy shifts pose significant threats to India’s services exports to the United States. Examples of recent policy changes that India has been forced to make under US pressure include its decision to eliminate its “Google Tax” and its announcement of tax holidays for foreign cloud service providers, which disproportionately advantage US companies. In this evolving context, the article analyses two major challenges. The first is the September 2025 H1B visa policy reforms, which increased application fees twentyfold (while these were recently pronounced as an illegal tax by a US federal court, they are likely to be appealed by the Trump Administration and ‘stayed’ for at least a few more months) and introduced a salary-based tier system, disadvantaging Indian professionals who comprised 73% of H1B recipients in 2023. It discusses not only the fee based challenges but also the challenges relating to H1B stamping and visa delays which have begun to significantly negatively impact Indian H1B applicants as well as the likely flow-on impacts on both future H1B and student applications to the US. The second is a proposed Congressional legislation, the HIRE Act, which seeks to impose a 25% excise tax on US companies that outsource services to foreign providers, in addition to removing some of their tax benefits, thereby significantly raising outsourcing costs for US companies, many of whom are Indian outsourcing clients and beneficiaries. These current and possible developments threaten India’s Information Technology (IT)-enabled services, emerging Global Capability Centres as well as its inward remittances from the US, the main, most important and fastest growing source of such remittances to India in recent years. Such US origin remittances have been critical in helping balance both India’s trade deficits and balance of payments situation, and have become even more important especially since the West Asia crisis has threatened the flow and sustainability of inward remittances from the Middle East and West Asia regions starting March 2026. The paper argues that India must urgently pursue long delayed strategic structural reforms as the way forward, primarily by building robust domestic high-tech employment sectors, diversifying export markets beyond the US toward the EU, UK, and RCEP (Regional Comprehensive Economic Partnership) member nations and expanding offshore operations while simultaneously managing the risks of potential political backlash.

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This note was published in NALSAR University of Law Journal, Hyderabad, India, on June 22, 2026.