Last Updated on August 27, 2025 by Royce Pierpont
In a significant policy shift, Indiana’s state leadership, led by Attorney General Todd Rokita and Governor Mike Braun, has taken decisive steps to redefine how the state approaches diversity, equity, and inclusion (DEI) initiatives. On August 21, 2025, the duo announced updated requirements for state contractors, mandating that they certify non-engagement in DEI practices that differentiate treatment based on race or sex in employment activities like hiring, recruiting, or promotions. This move, coupled with the cancellation of a long-standing minority business conference, signals a broader push to prioritize merit-based systems over what state officials describe as potentially discriminatory DEI frameworks. The decision has sparked a lively debate about fairness, opportunity, and the role of state government in shaping workplace culture.
A New Standard for State Contracts
The cornerstone of Indiana’s new approach is a revised contractual clause, effective for all state contracts signed on or after July 1, 2025. This clause requires contractors to affirm that they do not implement DEI policies that violate Indiana’s nondiscrimination laws. According to Attorney General Rokita, who oversees the review and approval of state contracts, the policy aims to eliminate practices that may inadvertently—or intentionally—favor one group over another based on immutable characteristics. “No one should get a free pass for unlawful discrimination, no matter how noble they claim their intentions are,” Rokita stated in a press release on August 21, 2025. “Treating people differently based on race or sex is not only illegal but undermines the principles of fairness and merit.”
The updated contract language explicitly prohibits DEI initiatives that conflict with state and federal civil rights laws. Contractors found in violation could face enforcement actions under Indiana’s False Claims Act, which Rokita’s office is prepared to wield as a tool to ensure compliance. This legal framework, Rokita argues, strengthens Indiana’s commitment to a level playing field where individuals are judged by their qualifications and contributions rather than demographic markers.
Governor Braun has echoed this sentiment, emphasizing that the state’s focus is on fostering “merit, excellence, and innovation” (MEI). In January 2025, Braun issued an executive order banning state agencies from using public funds to support DEI programs that grant preferential treatment based on race. The order, which required agencies to complete a review of DEI policies by July 1, identified over 350 instances of DEI-related language or initiatives in state government, many of which have since been replaced with MEI-focused policies. “Our goal is to ensure every Hoosier has an equal shot at success,” Braun said. “We’re replacing divisive policies with ones that reward hard work and innovation.”
Cancellation of the Minority Business Conference
In a move that has drawn both praise and criticism, Indiana canceled its annual minority business conference, an event traditionally aimed at supporting minority-owned businesses through networking, workshops, and access to state contracts. The decision, announced alongside the new contractor requirements, reflects the state’s broader shift away from programs that single out specific demographic groups. Instead, state officials are redirecting resources toward broader economic development initiatives open to all businesses, regardless of ownership demographics.
The minority business conference, which had been a fixture for over a decade, typically attracted hundreds of entrepreneurs and small business owners. In 2024, the event facilitated over $10 million in contracts for minority-owned businesses, according to data from the Indiana Economic Development Corporation (IEDC). However, critics of the conference, including some within Braun’s administration, argued that its focus on specific racial or ethnic groups could be seen as exclusionary, potentially alienating other small business owners who face similar economic challenges.
In place of the conference, the state is launching a new “Hoosier Opportunity Summit” in 2026, which will focus on providing resources and networking opportunities for all small businesses in Indiana. The summit will include workshops on securing state contracts, accessing capital, and navigating regulatory requirements. “We want to create an environment where every entrepreneur, regardless of background, has the tools to succeed,” said a spokesperson for the Indiana Department of Administration. The state has allocated $5 million for the summit, with plans to partner with local chambers of commerce and business associations to maximize outreach.
The National Context: A Growing Push Against DEI
Indiana’s actions align with a broader national trend of reevaluating DEI initiatives. On January 21, 2025, President Donald Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” directing federal agencies to ensure contractors do not operate DEI programs that violate federal anti-discrimination laws. This federal push has emboldened states like Indiana to take similar steps. In Missouri, Attorney General Andrew Bailey led a coalition of 14 states in a letter to the Business Roundtable, urging corporate leaders to abandon DEI practices that include quotas or racial preferences. “Discriminatory practices, no matter how they’re branded, have no place in our workplaces,” Bailey wrote.
In Indiana, the anti-DEI movement has gained traction in both legislative and executive branches. In April 2025, the state legislature passed Senate Bill 289, which limits DEI initiatives in schools, state government, and health profession licensing. The bill, signed into law by Governor Braun, prohibits training programs that assert the superiority or inferiority of individuals based on personal characteristics like race or sex. It also exempts minority, women’s, or veteran-owned business enterprises from certain restrictions, provided their participation is authorized by law.
The Debate: Fairness vs. Historical Inequities
The shift away from DEI-focused policies has not been without controversy. Critics argue that eliminating programs like the minority business conference risks exacerbating existing disparities. According to the U.S. Small Business Administration, minority-owned businesses in Indiana accounted for 12% of the state’s small businesses in 2024 but received only 8% of state contracts by value. Advocates for DEI programs contend that targeted initiatives are necessary to address historical inequities and systemic barriers that continue to affect marginalized groups.
Senator Fady Qaddoura, a Democrat from Indianapolis, voiced strong opposition to the state’s new direction during the Senate debate on SB 289. “This approach ignores the historical facts of discrimination that have pushed certain communities behind the starting line,” Qaddoura said. “Pretending we’re all equal now doesn’t erase centuries of unequal treatment.” He and other Democrats have called for a more nuanced approach that balances merit-based principles with targeted support for underrepresented groups.
On the other hand, supporters of the state’s new policies argue that DEI initiatives often overcorrect, creating new forms of discrimination. A 2024 survey by the Indiana Chamber of Commerce found that 62% of Hoosier business owners supported policies that prioritize merit over demographic-based preferences in state contracting. “Businesses want a fair shot based on their ability to deliver, not their owner’s identity,” said Kevin Brinegar, president of the Indiana Chamber. “This new direction aligns with what many in the business community have been asking for.”
Economic Implications and Future Outlook
Indiana’s economy, which ranks 19th in the U.S. with a GDP of approximately $480 billion in 2024, relies heavily on small businesses, which employ nearly 1.2 million Hoosiers. The state’s shift toward merit-based policies could reshape how these businesses compete for government contracts, which totaled $6.8 billion in the last fiscal year. By emphasizing universal access to opportunities, Indiana hopes to attract a broader range of businesses, including those in rural areas that have historically been underrepresented in state contracting.
The cancellation of the minority business conference has raised concerns among some economic analysts, who warn that it could reduce participation from minority-owned firms. However, the state’s investment in the Hoosier Opportunity Summit and other broad-based initiatives may mitigate these concerns. The IEDC projects that the new summit could generate $15 million in contracts for small businesses in its first year, surpassing the impact of the previous conference.
Conclusion: A New Chapter for Indiana
Indiana’s leadership is betting that a merit-focused approach will foster a more inclusive and competitive economic environment. By aligning state contracts and events with principles of fairness and nondiscrimination, Rokita and Braun aim to set a precedent for other states grappling with the complexities of DEI policies. Yet, as the state moves forward, it must navigate the delicate balance between addressing historical inequities and ensuring equal opportunity for all. The success of this approach will likely depend on how well Indiana can engage its diverse business community while maintaining its commitment to merit-based excellence.
As the Hoosier Opportunity Summit looms on the horizon, all eyes will be on Indiana to see whether this bold experiment delivers on its promise of fairness and prosperity for all.
