Indian IT Stocks Decline Amid US Tariff Announcement

Market Performance

Indian IT stocks sharply declined on Thursday, with the Nifty IT index dropping nearly 3%. This downturn followed US President Donald Trump's announcement of new reciprocal tariffs against major trading partners.

Shares of Persistent Systems led the losses among Nifty IT constituents, falling 6.5%, Coforge shares declined by over 4%, and Mphasis stock dropped by more than 3%. Additionally, major IT firms such as Tata Consultancy Services (TCS), Infosys, and HCL Technologies saw their share prices fall by over 2% each. Other IT companies, including Tech Mahindra, LTIMindtree, and Wipro, also experienced declines of more than 2% each.

This downturn in IT stocks aligned with a broader decline in the Indian stock market, influenced by a sell-off in global equities due to concerns about the economic impact of the trade tensions.

Impact of US Tariffs on Indian IT Industry

The US remains the most significant revenue contributor for Indian IT companies, accounting for over 50% of the industry's total revenue. The newly imposed tariff structure includes a 10% baseline tariff on all imports to the US, with a specific 26% reciprocal tariff on Indian imports.

These developments have raised concerns about potential macroeconomic pressures affecting various industries, including BFSI, automotive, retail, and discretionary sectors. Such pressures may result in delays in technology investments, which have already been subdued over the past two years.

Company Performance Overview

The financial performance of key IT firms remains crucial in assessing the broader impact of these market fluctuations:

• Persistent Systems: Declined by 6.5%
• Coforge: Dropped by over 4%
• Mphasis: Fell by more than 3%
• TCS, Infosys, and HCL Technologies: Each saw declines exceeding 2%
• Tech Mahindra, LTIMindtree, and Wipro: Recorded declines of more than 2% each

Summary

The recent decline in Indian IT stocks follows the introduction of new reciprocal tariffs by the US, contributing to a broader market downturn. With the US being a significant revenue source for Indian IT companies, these changes introduce potential uncertainties. While the immediate impact on IT services remains uncertain, industry-wide concerns over trade policies and economic pressures could influence technology spending patterns in the future.