Indian IT firms may escape Donald Trump’s proposed 25% tariffs—but that doesn’t mean they’re safe. A deeper, more dangerous threat is growing: their overwhelming dependence on the U.S. market.
Sandeep Kundu, a Delhi-based tech professional, laid out the warning in a widely shared LinkedIn post. “It’s not the tariffs,” he wrote. “It’s betting your whole business on one country.”
India exports over $200 billion in IT services annually, with more than half of that revenue coming from U.S. clients. While services aren’t taxed under Trump’s trade policy, Kundu points to a convergence of risks: tightening visa rules, rising costs, and slowing client demand in an inflation-hit America.
“H-1B rejections soared from 8% to 22%,” Kundu noted. “Onsite deployment delays are raising project costs by 6–8%, and U.S. clients may soon tighten tech budgets even further.”
Those numbers are backed by broader industry data. In FY2024, the U.S. accounted for 57% of Indian IT sector revenue. Some firms are even more exposed: Mphasis (82%), Persistent Systems (81%), LTIMindtree (75%), and HCL Tech (65%) all rely heavily on U.S. business.
The consequence? Indian vendors are left vulnerable to any economic, political, or regulatory shock coming from Washington.
“Even if tariffs don’t hit directly, client sentiment and budgets do take a hit,” Kundu wrote. “That alone can slow revenue and squeeze margins.”
Indian IT firms have started to diversify—but progress is uneven. Early movers have reduced their U.S. exposure by 10 percentage points (from 62% to 52%), with revenue growth from Europe (up 11%) and the Middle East (up 18%). Still, the U.S. and Europe together account for over 80% of the industry’s exports.
That leaves the sector highly concentrated—and exposed.
“The real risk isn’t policy,” Kundu concluded. “It’s concentration.”
