TCS, HCL Technologies, Infosys and Wipro Share Price Could See Further Decline as Global Market Face Selling

Akash Verma 7 April 2025

India’s information technology sector took a sharp hit Friday as shares of major firms dropped following renewed fears of retaliatory tariffs by the United States’ global trading partners. The market reaction came as industry leaders and analysts raised alarms over the broader inflationary impact and its potential to derail rate-cut decisions by the U.S. Federal Reserve.

Tata Consultancy Services (TCS), India’s largest IT services exporter, fell 3.07%, while Infosys Ltd declined nearly 3% on the domestic exchanges. The slide underscores mounting investor anxiety over the sector’s heavy reliance on the U.S. market.

Roughly 70% of export revenue for Indian IT companies comes from the United States, making the sector especially vulnerable to shifts in U.S. trade policy and any retaliatory measures from its global counterparts.

According to Sumit Pokharna, Vice President of Fundamental Research at Kotak Securities, any increase in tariffs could act as a double-edged sword for the sector.
“Higher tariffs may push inflation further above the Federal Reserve’s 2% target, potentially influencing the Fed to hold off on rate cuts,” Pokharna said. “This scenario is broadly negative for the IT sector.”

The broader macroeconomic picture hasn’t helped either. The Indian corporate sector is already grappling with rising input costs and slower urban consumption, both of which contributed to subdued earnings for the December 2024 quarter. Analysts now expect a tepid performance for the March 2025 quarter as well, as companies navigate an increasingly challenging global business environment.

Investor sentiment has been further dampened by the likelihood that U.S. firms, under cost pressure, may reduce discretionary spending—including IT outsourcing contracts. This would impact deal flows and delay decision-making cycles for Indian service providers.

The escalation in trade-related rhetoric also coincides with a politically charged period in the U.S., raising concerns that the volatility could extend into the second half of the year. As tariffs become a potential tool of economic leverage, the interconnected nature of supply chains—and India’s role in them—is being closely scrutinized.

While the long-term demand for digital transformation remains intact, the near-term outlook is clouded by uncertainty. Market watchers are urging investors to remain cautious, especially as central banks globally may recalibrate their monetary strategies in response to any inflation uptick caused by higher trade barriers.

In the absence of clear guidance on rate actions and trade policy from the U.S. administration, India’s export-heavy tech sector remains at risk of further correction.

Tata Consultancy Services (TCS)