Why Are Tech Companies Obsessed With India?

Images like these, of the world's leading technology and AI leaders alongside the Prime Minister of India, demonstrate how interested tech companies are in this country. It's here, in India, where tech giants including Amazon, Google, and Microsoft have pledged to invest over $67.5 billion to deepen their AI footprint. It is estimated that in 2025 alone, companies like Google, Amazon, and now OpenAI have opened Look at India. LinkedIn has just released its AI labor market report for 2026, and the headline is hard to ignore. Around 60% AI engineering job postings in India. The fastest growth among all major global markets. Meanwhile, in the United States, we keep hearing news about layoffs in the technology sector. Mounting layoffs across the tech industry, they're leaving tens of thousands of workers without many options. So just yesterday, we learned Meta is planning to cut 8,000 jobs or about 10% of its staff. It's just the latest in a wave of layoff announcements. Multi-billion dollar megastructures in some of India's largest cities, such as Mumbai, Bengaluru, and Hyderabad, demonstrate how committed these companies are to expanding in this country. Google announced a massive project in Visakhapatnam. They will be pumping in $15 billion in the next five years. For what? To build a massive artificial intelligence hub, an AI hub. Once completed, it will be the largest outside the United States. Since the $100,000 tariff on H-1B visas came into effect, companies have hired around 250,000 employees across India. At a time when AI is expected to reduce hiring, some of the world's biggest IT companies are actually hiring more people in India. And that is becoming a new global trend. Capgemini, Cognizant, and EPM systems have all increased headcount in India to drive growth and protect margins. What is concerning is that this seems to be a trend that is growing more and more. So why are tech companies hiring again, but outside the USA? Just two decades ago, India had become the back office of the world. While night fell in the West, thousands of buildings in India lit up to handle customer calls from the United States and Europe. In the early 2000s, more than 70% of global IT and business process outsourcing passed through India, with giants like Infosys, Wipro, and Tata Consultancy Services managing everything from technical support to payroll processing for multinational companies. In cities like Gurugram, entire towers housed call centers, where a single complex could employ more than 30,000 people. After weeks of training, many of them adopted neutral accents and Western names to assist customers thousands of miles away. By 2010, the sector was already generating more than $100 billion annually and employing over 2.5 million people, becoming one of the country's main sources of income. The fact that Transact Global has found success by serving largely its own market is an indication of just how far the market has come. India's IT sector has evolved so far out of its call center beginnings that it's now a $150 billion industry. India was not only participating in digital globalization, it was sustaining it from the shadows. The thing is, until then, India was a very basic tech hub, with delegated tasks that were quite simple. But now that seems to be changing. Tech companies have begun outsourcing the hiring of senior engineers to countries in Asia, and this is reflected in the massive investments in training and development being made by companies like Microsoft, which has committed $17.5 billion in India, its largest investment in Asia. Likewise, Google has pledged $15 billion for a new data center hub, while Amazon plans to invest $35 billion through 2030. And finding personnel is not difficult at all. It is estimated that each year, India produces around 1.5 million graduates in engineering and IT-related fields, a figure that by itself explains the scale of the phenomenon. Indian tech workers are a worldwide phenomenon, with 850,000 entering the global workforce every year. A primary source for this talent are the country's 23 Indian Institutes of Technology. They're among the most competitive engineering schools in the world. This enormous talent pool becomes the engine that powers both tech giants and rapidly expanding startups, allowing them to grow at a speed that is difficult to replicate in other markets. To put it into perspective, the USA graduates only about 80,000 computer science engineers annually. This difference makes India a very attractive place for companies seeking qualified personnel at a low cost. The salary gap is enormous. While a software engineer in cities like San Francisco can easily earn between $120,000 and $180,000 per year, and even exceed $200,000 in large tech companies. In contrast, in cities like Bengaluru, a similar profile usually earns between $10,000 and $25,000 annually, with higher salaries of up to $40,000 reserved for senior profiles or global companies. I shared my salary progression to making over $250,000 per year at Facebook, and the response was interesting to say the least. It became clear that software engineers in the United States make an order of magnitude more money than those doing the exact same job elsewhere in the world. It is a gap of up to 5 or even 10 times less for comparable talent, which explains why so many multinationals have moved key operations there. But relocating entire departments to the other side of the world is not an easy task. That is why many of these companies used to bring specialized talent to the United States. The H-1B visa was the best way to do it, allowing companies in San Francisco or Seattle to hire highly qualified engineers from countries like India and relocate them to the United States. In 2024, about 400,000 H-1B visa applications were approved. 65% of those were people renewing their visas. Tech companies dominate the program. The top companies with employees holding H-1B visas include Amazon, Google, Meta, and Microsoft. It's estimated that around 85,000 new H-1B visas are issued each year, although demand usually triples that number, making them a scarce and highly competitive resource. The H-1B visa is a program that allows U.S. companies to bring qualified personnel into the country, with relatively few procedures. Giants like Google, Microsoft, or Amazon have relied on the system for decades to strengthen their teams with global talent. But in 2025, something changed. The administration of Donald Trump imposed a $100,000 tariff on each visa application, making it extremely expensive for companies that used it before. We need workers. We need great workers. And this pretty much ensures that that's what's going to happen. I think, Sean, you agree with that? Well, they're $100,000 per year. So the whole idea is no more will these big tech companies or other big companies train foreign workers. According to the government, this measure was taken to discourage cheap mass hiring from abroad, and because it was believed that many companies, especially tech companies, were abusing this visa program. This made it no longer profitable for tech giants to bring foreign personnel into the country, so they began to change their strategy. Since the introduction of this new cost associated with the H-1B visa, the global talent map began to shift almost immediately. What used to be bringing engineers to cities like San Francisco or Seattle has now begun to transform into sending the work to where the talent is. Within months, many companies chose to accelerate outsourcing strategies, and regions like South America and Asia became key players. Countries like Brazil, Mexico, and Colombia began to attract projects that previously would have required relocation, driving exponential growth in exported tech services in several of these markets. Why pay double when you can get the same technical quality for less? That's exactly why U.S. businesses are hiring more Latin American talent than ever. It is estimated that spending on IT outsourcing services exceeded $460 billion in 2025 and maintains annual growth rates close to 12% At the same time, giants like Accenture and Globant aggressively expanded their distributed teams while India further consolidated its advantage with millions of available developers. But India is not only an ideal place for outsourcing due to its low costs but also due to the lack of regulation. As a highly populated country with historically more flexible regulatory frameworks regarding data, India has, in many cases, ended up functioning as a real large-scale laboratory for the tech industry. With more than 1.4 billion inhabitants and over 850 million internet users, any product can be tested with a diversity of users that is difficult to replicate in other markets. India has the second highest number of internet users in the world, more than double the U.S. This is largely thanks to the country's vast digital infrastructure. India has more than 700 million smartphone users. It has access to cheap data. It has digital payment platforms and public identity platforms. That scale is unmatched by any other country. In terms of data storage and usage, India has historically offered a more permissive environment than the United States, allowing tech companies to experiment more freely. While in the United States, companies are subject to a complex web of laws that limit how long they can store personal data, how it must be anonymized, and under what conditions it can be reused. In India, it is quite the opposite. It is common for digital platforms to retain large volumes of user data for longer periods. Moreover, this data can be reused for algorithm training, intensive personalization, or testing new products, often without the same level of restrictions or oversight. This allows, for example, the training of artificial intelligence models with massive data sets of real behavior, from payment patterns to app usage, at a scale difficult to replicate in more regulated markets. The data generated by all of the Indians using their devices is massive, and that is a goldmine. There is not any other country that can generate this scale of data. Although new laws in India have introduced clearer limits and obligations, the country still offers, in practice, greater operational flexibility than the U.S., which continues to attract companies seeking to iterate quickly and at scale. Since the rise of artificial intelligence, India has once again become the preferred destination for big tech, but this time, not only for simple tasks. Roles such as AI engineers and developers are skyrocketing, as it is estimated that in 2025 alone, demand for profiles in machine learning, data engineering, and AI ops in India has grown by more than 30 percent, far above Western markets. Additionally, an interesting phenomenon has emerged – remote hiring. Startups and Silicon Valley companies no longer need a physical presence to operate. In other words, they hire entire teams in India from day one. For decades, American companies have looked outside of the U.S. to employ foreign workers at a fraction of the cost of their American counterparts. A recent article published by Axios sheds light on how some of these companies are not only outsourcing their jobs, but forcing the workers to train their foreign replacements. Global talent platforms and remote first models have made it possible for a company to grow from five to more than 100 engineers in less than a year, without leaving cities like Bengaluru or Chennai. This has led to situations where, in some cases, more than 40 percent of the technical team of U.S. startups is already outside the United States, with India as the main destination. Likewise, companies have begun to go beyond traditional outsourcing. Instead of building large offices, they're hiring remote talent working directly from home in India, further reducing operating costs. Maintaining a tech campus in cities like Bengaluru can cost millions of dollars per year in rent, infrastructure, and services, while a remote first model can cut those expenses by 30 percent to 50 percent. After the pandemic, more than 60 percent of global tech companies adopted hybrid or remote schemes, and many took advantage of this shift to expand international hiring without needing a physical presence. Companies like GitLab or Automatic operate with globally distributed teams, including hundreds of developers in India working from home. Meanwhile, giants like Microsoft have maintained flexible policies that allow engineers to work remotely within the country. Up to 7 percent of their U.S. workforce is going to be canned under this. All the while, they have 20,000 employees in India. They're cranking up H-1B, foreign visa worker sponsors, and they're cranking up their presence in India. This is not a layoff. This is not a buyout. I don't care what Microsoft PR is saying on the branding. This is worker replacement at scale. In addition, platforms like Deal or Remote have facilitated this model, allowing startups to hire engineers in India within days. And the result is clear. Companies are not only moving work beyond their borders, but also beyond their own offices, creating a global network of distributed talent. Subscribe and let us know what you think in the comments below.