In the wake of the US reciprocal tariffs, Indian IT services firms are facing project delays, with giants like Tata Consultancy Services (TCS), Infosys, and Wipro feeling the strain. This impact is palpable in their recent earnings reports, showcasing a trend of uncertainty affecting project timelines and client decisions.
TCS, for instance, highlighted a shift in the business environment since March, leading to delays and ramp-downs, particularly in the US. Wipro echoed similar sentiments, citing negative market shifts in the US and Europe due to tariff hikes. Infosys, on the other hand, noted tariff pressures but minimal effects on ongoing client discussions.
As the US pushes for onshoring and tariff uncertainties loom, IT outsourcing faces challenges, prompting companies to reassess their expenditure post the 90-day tariff hold. This pause, intended to offer respite, has instead deepened client hesitations, causing deal postponements and digital transformation slowdowns.
Looking ahead, the looming question revolves around the aftermath of the tariff hold expiration. Potential reinstatements or expansions could trigger contract renegotiations and client attrition. Experts predict structural changes in how US firms engage with IT services, emphasizing the need for firms like TCS to adopt flexible engagement models for future growth protection.
Navigating through this uncertainty, Indian IT firms are bracing for a transformed landscape where trade policies overshadow technology disruptions. Despite the challenges, TCS remains optimistic about FY26, while Infosys explores expansion avenues in regions like Japan to diversify its market presence amidst the ongoing tariff turmoil.