Since the US market accounts for the majority of their revenue, Indian IT services companies are particularly vulnerable to these developments. The companies most reliant on the US include Birlasoft (86.3% of US revenues), Mphasis (83.5%), Persistent Systems (79.8%), and LTIMindtree (74.4%).
Global headwinds have been plaguing the Indian stock market, and over the past year, benchmark indices the Sensex and Nifty 50 have failed to produce any returns. Investor mood has remained muted due to worries about stretched valuations, disappointing corporate profits, and ongoing outflows of foreign capital.With effect from August 2025, US President Donald Trump has hiked duties on Indian imports to as high as 50%, which further increases the uncertainties. In addition to the 25% tax previously applied to a number of imports, this also includes a 25% reciprocal tariff connected to India's purchases of Russian oil. India's export-oriented industries have been negatively impacted by the increased levies; the IT, textile, jewelry, and seafood industries are especially at risk.
Trump's announcement of a high $100,000 annual charge on H-1B visas, which would take effect on September 21, 2025, made matters more difficult. The price would be applied to all new H-1B files starting with the upcoming visa lottery cycle, which will raise the cost of onsite deployment for Indian IT companies, which make up around 70% of H-1B visa holders.
Trump's announcement of a high $100,000 annual charge on H-1B visas, which would take effect on September 21, 2025, made matters more difficult. The price would be applied to all new H-1B files starting with the upcoming visa lottery cycle, which will raise the cost of onsite deployment for Indian IT companies, which make up around 70% of H-1B visa holders.
Pressure on the IT Sector
Since the US market accounts for the majority of their revenue, Indian IT services companies are particularly vulnerable to these developments. Businesses with the greatest reliance on the US include Birlasoft (86.3% of US revenues), Mphasis (83.5%), Persistent Systems (79.8%), and LTIMindtree (74.4%), according to Nirmal Bang Institutional Equities Research. In the meantime, Tata Consultancy Services (TCS) is the industry leader in H-1B applications, with Infosys, HCL Technologies, and Wipro following closely behind.
Since the US market accounts for the majority of their revenue, Indian IT services companies are particularly vulnerable to these developments. Businesses with the greatest reliance on the US include Birlasoft (86.3% of US revenues), Mphasis (83.5%), Persistent Systems (79.8%), and LTIMindtree (74.4%), according to Nirmal Bang Institutional Equities Research. In the meantime, Tata Consultancy Services (TCS) is the industry leader in H-1B applications, with Infosys, HCL Technologies, and Wipro following closely behind.
The increase in H-1B fees alters aspirations across disciplines and has an effect on more than just the cost structures of IT organizations. There could be repercussions beyond sectoral revenues if more young Indians pursue alternative educational and career paths, according to Mohit Gulati, CIO and Managing Partner of the ITI Growth Opportunities Fund.
However, analysts advise against exaggerating the disruption. Through more local hiring in the US, near-shore facilities, and offshore delivery, the IT industry has been progressively changing.
However, analysts advise against exaggerating the disruption. Through more local hiring in the US, near-shore facilities, and offshore delivery, the IT industry has been progressively changing.
In America, a combination of near-shore centers, offshore deliveries, and deeper local recruiting is replacing the previous paradigm of rotating engineers on-site. This implies that not all IT stocks will move in the same manner for investors. Businesses that can swiftly rewire their operating model, withstand cost shocks, and yet produce results for clients at scale will emerge victorious. "Those who continue to follow an outdated strategy will lose," stated Viram Shah, the founder and CEO of Vested Finance.
Impact of Tariffs Outside of IT
India's traditional export industries are also severely impacted by the increased US tariffs. Exporters of seafood, textiles, and jewels and jewelry are especially at risk. With almost a third of yearly exports totaling $28.5 million, the US is the biggest market for Indian jewelry and diamonds.
Impact of Tariffs Outside of IT
India's traditional export industries are also severely impacted by the increased US tariffs. Exporters of seafood, textiles, and jewels and jewelry are especially at risk. With almost a third of yearly exports totaling $28.5 million, the US is the biggest market for Indian jewelry and diamonds.
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