Under the second Trump administration, the global business process outsourcing (BPO) industry is adapting to mounting U.S. protectionism, with potential reshoring and nearshoring policies on the horizon. In response, BPO hubs worldwide are making strategic shifts to maintain competitiveness and navigate this evolving landscape.
BPO reacts to U.S. protectionist policies
During Trump’s first term, the Philippine IT-BPO sector experienced a noticeable slowdown in growth due to protectionist policies that discouraged outsourcing. With his return to office, similar policies could pose renewed challenges for an industry where 70% of clients are U.S.-based.
The Information Technology and Business Process Association of the Philippines (IBPAP) urges companies to adopt a more agile and innovative approach to sustain growth. “What got us to $38 billion in revenue and 1.82 million jobs [in 2024] may not get us to where we want to be,” IBPAP President Jonathan Madrid said.
He also emphasized diversifying organizational leadership to address complex challenges and seize emerging opportunities.
One such opportunity might come from Trump’s latest protectionist policies, which impose a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese goods. The increased costs could push U.S. businesses to cut expenses elsewhere, potentially increasing demand for outsourcing.
Shifting focus to high-value services
The global BPO sector is shifting its focus toward high-value services to mitigate risks from automation and protectionism. Industry leaders aim to position the Philippines as a global hub for specialized sectors such as banking, healthcare, and digital transformation. This will diversify offerings and reduce reliance on lower-value tasks prone to reshoring and automation.
This trend extends globally as the BPO market transforms amid stagnation in traditional outsourcing due to automation and self-service technologies. Meanwhile, high-value, tech-driven services, including AI-powered decision support, industry-specific analytics, and regulatory compliance solutions, experience robust growth.
Technology plays a dual role in this transformation. Robotic process automation (RPA), conversational AI, and predictive analytics enhance efficiency and customer experience. But they raise concerns about workforce displacement, high investment costs, and ethical considerations regarding AI bias and compliance.
India’s strategic approach to IT outsourcing
India’s IT outsourcing sector remains cautiously optimistic. Indian Global Capability Centres (GCCs) have evolved from cost-effective outsourcing hubs to key local offices supporting global companies’ operations, finance, and research and development.
The Indian GCC market could grow from $64.6 billion in 2024 to between $99 billion and $105 billion by 2030, reflecting the sector’s strategic pivot toward higher-value services and global integration.
On February 13, U.S. President Donald Trump and Indian Prime Minister Narendra Modi met at the White House to discuss an early trade deal and resolve their ongoing tariff standoff. Modi pledged to increase India’s U.S. oil, gas, and military equipment purchases while addressing illegal immigration. Both nations plan to finalize the deal’s first phase by fall 2025.
Although India strengthens its economic ties with the U.S. through trade negotiations, global trade uncertainties persist.
“Rising trade tensions and further moves toward protectionism might disrupt supply chains, raise consumer prices, and negatively impact growth,” the Organisation for Economic Co-operation and Development (OECD) warns.
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Innovative Systems Group. (2024, November 26). The Future of BPO: Top Trends to Watch in 2025. Retrieved March 13, 2025, from https://www.innovativesys.com/the-future-of-bpo-top-trends-to-watch-in-2025
Mencias, E. (2025, March 10). Madrid pushes for innovation in the IT-BPO sector amid U.S. protectionism. Bilyonaryo. Retrieved March 13, 2025, from https://bilyonaryo.com/2025/03/10/madrid-pushes-for-innovation-in-the-it-bpo-sector-amid-u-s-protectionism/technology/
