What is DEI, why many US corporate giants dropped it and what it means in India

The debate around Diversity, Equity, and Inclusion (DEI) has intensified in the US – especially after Donald Trump’s re-election – with several multinational companies including Walmart, Ford and Toyota scaling back or scrapped DEI programs, citing changing market dynamics or scepticism about their effectiveness.
The move has sparked discussions and concerns about the future of workplace diversity and whether these initiatives were merely performative.
It was the murder of George Floyd in 2020 and the subsequent wave of racial unrest across the United States of America that prompted corporate America to renew and publicly amplify its DEI commitments. That surge in action, often referred to as the ‘racial reckoning,’ extended beyond the corporate world, with universities also implementing explicit DEI initiatives.

DEI initiatives really took off in 2020, driven by the social justice movement (Black Lives Matter) that followed George Floyd’s death. (Photo: AFP)

Fast forward to 2024, and much of the fervour surrounding equity and diversity seems to have dissipated. The once loud dialogues have quieted, and many companies that previously pledged allegiance to DEI are now quietly rolling back their commitments. So, what is the reason behind it? It also begs the billion-dollar question – do Indian professionals in US need to worry given the recent pushback against DEI and what are the ground realities in India?
But first,
At its core, DEI stands for Diversity, Equity, and Inclusion – a framework designed to create workplaces, educational institutions, and communities that are more representative, fair, and welcoming to all individuals, regardless of their background.
DEI initiatives include policies to make hiring fairer, training sessions to help people understand and tackle unconscious biases or even groups where employees with similar backgrounds or experiences could come together for support (often called employee resource groups or ERGs). Some companies also set up mentorship programmes to help people from underrepresented groups move up the career ladder.
These initiatives really took off in 2020, driven by the social justice movement (Black Lives Matter) that followed George Floyd’s death. Following this, over 80 per cent of companies introduced DEI-focused programs.
According to McKinsey’s report Diversity Matters Even More, by 2023, the number of women in executive roles increased by 20 per cent, while ethnic diversity at the leadership level went up by 15 per cent compared to 2020. The report also highlighted a significant advantage for companies leading in diversity: they were 39 per cent more likely to financially outperform those with lower representation in leadership roles. Mostly it showed positive trends in the workplace after its enthusiastic implementation.
But now, they’re facing pushback.
Despite the clear benefits of DEI initiatives, they’ve become a prime target for US conservatives. Critics argue that these programmes are part of a “woke agenda” and claim they discriminate against white workers. The backlash has been so intense that Conservatives have even threatened to boycott brands that continue to support DEI. In response, many companies are scaling back – or outright abandoning – their diversity policies.
Big names like Walmart, Ford, Coors, Lowe’s, Boeing, Toyota, Caterpillar, Craftsman, John Deere, Jack Daniels, Tractor Supply, and Harley Davidson have already scrapped their DEI programmes entirely. And as you read this, more companies are likely to follow suit or are seriously considering it.
This shift comes just as Donald Trump secures his second term as the US president – a stark reminder of his administration’s stance on these issues. In fact, one of Trump’s final moves during his first term was signing an executive order that banned diversity training in federal government agencies.

The debate around DEI has intensified in the US – especially after Donald Trump’s re-election. (Photo: Getty Images)

A report from The Conference Board reveals that over half of business leaders are finding it increasingly challenging to sustain DEI efforts amid the current political and social climate. With resistance expected to grow, the future of corporate DEI looks uncertain, as more companies may continue scaling back or abandoning these initiatives altogether.
While the aftermath of Trump’s re-election as the President and the shifting DEI narrative are being linked, the US Supreme Court, too, has a part to play.
The Supreme Court struck down affirmative action (a mandatory quota in college admissions much like DEI), declaring that using race as a factor in college admissions is unconstitutional. This had a domino effect and corporations are now rethinking DEI policies.
Now, as DEI faces mounting pushback, MEI – Merit, Excellence, and Intelligence – has emerged as a proposed alternative. Scale AI founder Alexandr Wang, backed by Elon Musk on X, champions MEI for focusing solely on individual merit in hiring, without considering demographic factors. Wang argues that diversity-hiring perpetuates bias, while MEI ensures fairness by selecting candidates based purely on skills and performance, eliminating stereotyping and tokenism.
Notable corporate leaders are at the forefront of dissing the initiative, calling it “woke”, “racist” etc.
In January, Elon Musk took to X (formerly Twitter) to announce to his 168 million followers that diversity, equity, and inclusion (DEI) was “just another word for racism”. Musk’s comment was in response or rather in appreciation to Bill Ackman’s 4,000 word opus on X that criticised DEI policies and celebrated the successful resignation of Harvard’s first Black and female president, Claudine Gay.
Robby Starbuck has emerged as a prominent critic of DEI (Diversity, Equity, and Inclusion) initiatives and is also the man responsible for Walmart scaling back their DEI policies.
Starbuck has publicly criticised nearly a dozen companies in his videos, all of which later scaled back their DEI policies. Leveraging his social media following of around 3,60,000 on Instagram, he has also issued boycott threats, amplifying pressure on these corporations to retreat from diversity initiatives.
Well, the answer is yes and no at the same time. While DEI policies may be something raising eyebrows at the moment tbh, it has been around since the 60s. Only then it was not as much highlighted.
DEI initiatives in the US trace their roots back to the Civil Rights Movement of the 1960s. Key legislation such as the Equal Pay Act (1963) and Title VII of the Civil Rights Act (1964), which prohibited discrimination in the workplace, laid the foundation for modern DEI efforts.
Workplace diversity training began with equal employment laws and affirmative action to address racial discrimination and integrate offices. Early programs used workshops and bias identification exercises but had limited impact, especially on white or male employees in power. Efforts like hiring tests to reduce bias faced resistance from managers who disliked restricted choices. By the 1970s and 1980s, diversity training expanded to include gender equality and hence, embrace a wider spectrum of diversity. Around this time, they also felt the necessity to include ethnic, religious, and LGBTQ+ communities as well.
In the following years, there was continued support and effort to create DEI-focused jobs and training until we know what happened in 2020, following which, most companies joined the DEI initiative bandwagon, almost willingly and with minimal effort.
Sarbojit Mallick, co-founder, Instahyre, an AI-powered talent acquisition platform, tells India Today, “Indians cannot behave like ostriches with their heads hiding in the sand to avoid the fallout of overzealous DEI by American industries. There is no doubt their professional performances will be the target of scrutiny due to the backlash against DEI.”
But Mallick suggests Indians need to pull up their socks and prove their worth to overcome the accusations of unfair promotions or preferential treatment that might be levelled against them.
“This issue is not going to go away, so they should face facts, and India Inc should learn from the mistakes committed in the US,” he adds.
However, Anuj Prasad, CEO of Desmania Design, a Gurugram-based design company, suggests that Indian communities in the US will likely weather the backlash against diversity initiatives.
“Although they are a smaller group, their contribution to the US economy is disproportionate. This unique position gives them a degree of protection amid the ongoing DEI debates,” he mentions.
In India, while DEI discussions are less intense than in the US, the concept is beginning to take hold, particularly in urban corporate settings and academic institutions.
Abhinav Shrivastava, co-founding partner, GSL Chambers and advocate-on-record, Supreme Court of India, explains, “The focus in India tends to centre more on caste, gender, and regional disparities, with affirmative action policies/ legislations [The Equal Remuneration Act, 1976; The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013; The Persons with Disabilities (Equal Opportunities, Protection of Rights, and Full Participation) Act, 1995; etc.] already addressing inequalities in education and employment.”
He adds that debates have been ongoing in India concerning various reservations and their implementation. However, DEI policies in India are still evolving, and the growing global conversation about DEI could influence India, particularly in multinational companies operating there, though the specific issues addressed may differ from those in the US.
India’s startup culture has grown rapidly in recent years, with the country becoming a global hub for innovation and entrepreneurship. Hence, startups can be the flagbearer for the wider employer ecosystem.
“We believe that Indian startups and the wider employer ecosystem are increasingly recognising and prioritising this and while significant work still lies ahead, we are seeing positive movement, some examples being increasing numbers of women on shop floors, and more employers starting returnship programs to re-engage women post career breaks,” says Sowjanya Kanuri, director, ACT For Education and ACT For Women.
The multicultural scope of India’s population lends itself towards the acceptance of diversity, equity, and inclusion. However, there are other factors in the form of hidden biases, gender inequalities, and socio-economic disparities which can impede development.
Ruchi Tambi, senior HR manager, gradding.com, speaking to India Today says, “Diversity, equity, and inclusion have become key global objectives for organisations, including in India. While the intention to embed these values within workplaces is growing, the practical implementation of this vision faces challenges in India.”