MNCs pull back DEI efforts globally; Indian firms urged to seize inclusion agenda

Several multinational companies, especially those headquartered in the US or closely working with the US government, are scaling back their diversity, equity, and inclusion initiatives globally.

There is a deep rumble of uncertainty as several MNCs scale back on their diversity, equity and inclusion (DEI) initiatives. Where once corporates would rush to showcase their DEI programmes to the media and the world, there is now unexpected hush and silence.

 “US-headquartered MNCs and large Indian services players with clients in the West have certainly reduced the optics and dialled down showcasing their DEI efforts,” says Tarunesh Madan, Co-Managing Partner, Amrop India, a global Executive Search and Leadership Advisory firm.

Corroborates Neha Bagaria, Founder & CEO of HerKey (formerly JobsForHer), “In the case of MNCs, we’ve definitely seen a step back from specific DEI initiatives. MNCs that work very closely with the US government have been told that they can’t be even seen to be supporting any such initiatives anywhere in the world.” Bagaria notes that sponsorship  of DEI events has gone down, as well as other DEI branding efforts. 

Consulting and training firms feel the DEI freeze

Consulting firms that run upskilling programmes for women, including leadership development training, say they are impacted as MNCs are no longer nominating their employees for such courses. 

Saundarya Rajesh, Founder-President of the Avtar Group, which works extensively  on workplace inclusion, notes a shift in how MNCs approach  their DEI activities. “As per a dipstick survey conducted by Avtar in February 2025 on India Inc.’s position in the DEI debate, at least 50 per cent of the Indian divisions of US MNCs stated that DEI initiatives have been paused. But it is worth noting that 33 per cent of the companies stated that they will be pursuing DEI with modifications.”

“This is what we are witnessing now,” elaborates Rajesh. “While these companies are not pursuing DEI explicitly, it is now unfolding through CSR initiatives and cultural transformation efforts that is putting inclusion at the forefront,” she says.

Indian firms urged to lead with localised DEI model

Indian companies are continuing their DEI efforts without significant change, according to Rajesh, a view echoed by Bagaria and others, with the caveat that efforts by Indian firms are nowhere near those of MNCs.

As Madan says, India Inc. still has a long way to go in terms of its diversity quotient. He adds, “In the US, many companies created lip service roles such as head of DEI initiatives etc and a lot other roles purely to signal diversity and these are the roles that are now getting cut down.”

Acknowledging the challenges that DEI efforts are facing due to the scaling down by MNCs, Pritha Dutt, Chairperson Centre for Gender Equality & Inclusive Leadership at the XLRI, says that perhaps this is the best time for Indian companies to step up on the agenda and seize the initiative. “We have an opportunity to create a uniquely India centric model — one that integrates all the statutory mandates, the company’s own policies on equality and inclusion and contemporary aspirations of our youth,” she says.

Rajesh, who notes that companies are shifting from a target-based approach and moving towards a retention-focused inclusion strategy, also highlights a positive side. “We may see a new approach to DEI emerging – one that is very outcome driven and less on optics. As we see companies designing gender-neutral enablers such as work-life integration programmes for both men and women, flexible work for all Gen Zs and paternity leave for millennial dads, I am confident that the new DEI may actually end up being more inclusive than before!” she says

Published on July 11, 2025