The targeted import tariffs by the U.S. and the recent tax policy changes enacted through that country’s ‘One Big Beautiful Bill’ will mean Indian companies investing abroad would need to consider a “strategic pivot” and explore other geographies, according to EY India. 

This comes at a time when India’s outbound investment, including to the U.S., has been growing strongly.

According to a report by EY India titled ‘India abroad: Navigating the global landscape for overseas investment’, India’s overseas investment had grown to $41.6 billion in 2024-25, up 67.7% over its level in 2023-24, which itself was 8.8% higher than the $22.8 billion seen in 2022-23.

Of this, Indian investments in the U.S. accounted for 11.5% of India’s total outward investments in 2024-25.

“The announcement of targeted import tariffs and the wide-ranging tax changes proposed through the ‘One Big Beautiful Bill’ have added fresh layers of complexity for companies operating across borders,” the EY report said. “For Indian businesses, these changes are more than just headline news — they are strategic signals that necessitate a decisive pivot in outbound direct investment strategies.”

EY India added that it expects Indian enterprises to diversify their investments and accelerate their expansion into Europe, the Middle East, Southeast Asia and Africa. 

“This reflects a deeper strategic realignment, i.e., reconfiguring global value chains, advancing free trade agreement (FTA) negotiations, and prioritising jurisdictions that offer tariff and cost advantage along with stability in an uncertain trade environment,” it said.