Ripple Effects of Trump's Tariff: Looming Uncertainty for Indian IT Sector

The Indian IT sector, while not directly affected by Trump's tariff orders, faces potential indirect impacts due to slower US GDP growth. These include delays in decision-making, which may affect demand for services. However, long-term opportunities may arise from increased outsourcing and tech adoption.

The Indian IT sector isn't directly affected by President Trump's recent tariff order, but potential indirect impacts loom large. Slower GDP growth in the U.S. could lead to delayed decision-making, affecting demand, analysts suggest. Despite this, outsourcing and tech adoption could create long-term opportunities for the sector.

The $250-billion Indian IT industry is closely monitoring the situation, assessing the unfolding impacts in the coming quarters. Shares of major IT companies, such as Infosys and TCS, faced declines following Trump's tariff announcement. Meanwhile, trade negotiations could further influence sector dynamics.

Tariff-induced economic sluggishness may tighten client budgets, impacting revenue growth for Indian IT firms predominantly catering to U.S clients. Yet, with a strong offshore presence and reduced reliance on H-1B visas, these firms are poised to tackle new challenges, maintaining optimism for future growth.

(With inputs from agencies.)