At a time when many US companies have either scaled back or eliminated a few aspects of their Diversity, Equity, and Inclusion (DEI) initiatives, companies in India intend to continue with their DEI programmes, said a survey by workplace culture consulting firm Avtar.

The findings showed that the American companies’ current approach of handling DEI programmes have no significant impact on Indian companies and non-American multinationals. However, when it comes to Indian affiliates of American companies, half of the surveyed companies said that they are either stopping their DEI programmes temporarily or indefinitely.

At least 33% of the companies stated that they would continue DEI with some modifications. It means that DEI would not be pursued under a formal agenda but would be adopted either through CSR or by transforming the workplace culture. “Among the US companies, 50% of their Indian entities said that their DEI initiatives will continue unchanged (17%) or with some modifications (33%),” it added.

Over 30% of the Indian affiliates of US-based companies viewed that discontinuing DEI could reduce the organisation’s ability to attract talent, and 28% said that it could lead to poor employee morale, it said. 

Meanwhile, senior leadership from 44 Indian and multinational companies (18 US-based companies, 13 homegrown Indian companies and 13 non-US multinationals) took part in the survey.

“The DEI movement in our country emerged as a cultural necessity for organisations since we have a highly diverse talent pool. Companies here have always prioritised building a culture of inclusivity for their employees. DEI in Indian companies is also a function of government mandates, such as the Maternity Benefit Act, POSH Act and the SEBI directive on women on boards,” Saundarya Rajesh, founder-president, Avtar Group, said in a statement.

“An ideal workplace must be filled with diverse resources”

An ideal workplace must be filled with resources from diverse backgrounds bringing in unique skills needed for the role that employees play at the organisation, Saundarya Rajesh mentioned in an interview with People Matters some time ago.

“An organisation’s reputation amongst the various stakeholders – employees, customers, suppliers can be improved through a diverse workforce. Different employees being able to interact/help/engage with different customers in a personal way with shared lived experiences and understanding leads to customer/vendor/employee loyalty,” she added.

Why are US companies rolling back DEI programmes?

US companies have been rolling back DEI programmes in recent years due to both internal and external pressures. DEI programmes, focused on race, gender, and equity, have been criticised that these can lead to "reverse discrimination" or create unnecessary divisions at workplaces. 

In some places, laws have been introduced to limit or ban DEI programmes, especially those addressing topics like critical race theory or the role of race in hiring practices. Companies were compelled to roll back DEI initiatives to avoid legal risks.

Some companies have limited their spendings on DEI due to fund shortages. As businesses focus on cost-cutting and profitability, DEI initiatives take a back seat. 

Companies have questioned the long-term impact of DEI initiatives, with critics arguing that they don't lead to meaningful changes in workplace culture or diversity. As a result, companies are scaling back such programmes. 

Firms may also shift their focus away from such programmes when they believe that addressing issues like innovation, efficiency, or productivity should take precedence over DEI. 

Is everyone following the herd? 

In 2025, several big companies have reassessed their DEI commitments, influenced by political propaganda and evolving public sentiments. Companies such as Bank of America, Walmart, Target, PepsiCo, KPMG, and BlackRock have scaled back or modified their DEI initiatives recently. 

In contrast, a few companies have reaffirmed their commitment to DEI. Apple shareholders recently rejected a proposal to cease the company's DEI efforts, with 97% voting against it. 

Similarly, Costco's board opposed a proposal to assess the risks of maintaining DEI policies, with 98% of shareholders voting against it.