The Indian it sector in 2025: a tough road ahead after Trump’s Reciprocal Tariff Declaration

Introduction

Most of us has mained some expert to the it sector with stocks like tcs, infosys, tech mahindra, etc. Even if you do not invest in directed stocks, you’re still probally curious about what’s happening in this sector. In this blog post, I’ll share my views on the it sector as a whole. Why? Being in the backdrop of trump’s reciprocal tariffs, the sector that’S most dependent on revered on revealed from the us is this. So as an investment it is only logical to wonder what’s in store for this sector in time to come. Also, One of My Reader (Sagar Domde) has also reminded me to share my views on this Subject.

Suggeded reading, How Re-Baselining and Self-Cannibalization is redefining indian it sector in 2025

A bad fy2025-25 start for it stocks

Sl	Name	Sector	Market Cap	Price	1D %	7D %	3m %
1	Tcs	Technology	11,93,770	3,299.40	-3.05	-9.64	-19.52
2	Infosys	Technology	6,03,178	1,451.65	-3.00	-9.47	-25.12
3	Hcl tech	Technology	3,85,829	1,422.10	-3.27	-12.76	-26.95
4	Wipro	Technology	2,57,876	246.30	-3.92	-9.52	-16.35
5	Tech mahindra	Technology	1,29,379	1,320.95	-3.53	-7.23	-21.81
6	Ltimindtree	Technology	1,22,563	4,136.25	-4.74	-11.16	-27.86
7	Persistent Systems	Technology	71,270	4,609.95	-3.83	-18.28	-28.04
8	Coforge	Technology	44,245	6,607.90	-7.68	-18.50	-31.66

Indian it stocks had taken a big hit in the last 2 days.

Companies like Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro, Tech MahindraAnd a few others like LTI Mindtree, Persistent Systems, And Coforge Have Taken some beating.

These are the big names in the Technology SectorThese stocks are the backbone of our Nifty it indexIn the last two days the index itself has corrected by about -3%. By the ways, amid the overall correction of the whole market happening since SEP-2024, it sector was anyways correcting. But in the last 2 days, the correction has become steepr.

People like me have ket some it stocks in our portfolios since many years now. I do not remumber, even during tough time, I’ve ever thought of selling them completely. But this time, it looks different and many are now wondering if it is now the time to do the unthinkable.

Check the above tableIn the last 7 days, almost all of these top stocks have corrected between 7% to 19%. Their 3 months decline are even severe.

Some of us (who are not always glued to the news) might be wondering, Why did this happy? What’s Going on?

The cause of this steep price decline is the announcing that came from the us on April 2, 2025. Donald Trump, Who’s Back in the Spotlight, Declared Something Called The Reciprocal Tariff Policy. You can read about the reciprocccal tariff in detail here,

What is reciprocal tariff? In Simple Terms, This means the US will impose tariffs (taxes), on goods and services coming from other countries, including India, if there counties don’t counten Products.

Since Indian It Companies Gets about 60-70% of their Revenue (Rough Average Estimate) from the USThis news is bad for these companies. So, as a worried investor, some are seling their it stocks causing this steep correction.

So the question is, shall we too start selling? This is what this post will try to uncover.

[But again, this disclaimer is necessary. It’s not an investment advice, I’m just sharing my feeling based on my readings and experience.]

The it sector was alredy struggling

If you look at the numbers, these it stocks have been struggling since SEP-2024 (More than 6 months). Since then, the nifty it index has corrected by more than 12%.

I dug into the data for a more specific stocks and here are my findings (it’s not pretty).

• TCS, for example, is down -19.52% in the last three months. So it was already Falling Before This tariff News.
• Infosys is Down -25.12%.
• HCL Technologies Fell 25.46%,
• Wipro was down 15.62%.
• Even the smaller companies like Coforge and Persistent Systems Saw Declines of 26.19% and 26.04%, respectively.

These are all big drops. So, why these stocks alredy Falling?

The Global Economy has been in the best shape. There’s been a slowdown in the US and europe, which are the biggest markets for our companies. Clients there are spending les on tech services, high interest rates, high interest rates, and fears of a recession. With the Above Happening in the Client’s End, domestically our rupee has been weak against the us dollar. This makes it harder for our companies to manage costs.

The Above Concerns were Severe Enough to Show Its Effect on the share price of these companies.

And then came the Trump’s tariff Declaration. It feels like someone just poured more salt on an alredy open wound. I think it’s a tough time to be an it investor right now,

Having said that, it is also true that most of my good investments are the only I bough and help on to through all market cycles. Yes, there could be a less exceptions like Future retail, jet airways, and yes bank And that is why a close eye on the evolving news is a must.

What does this mean for long-term investors like us?

I know, many reading this area long-term investors.

Maybe you’ve been holding tcs or infosys shares for many years. You’ve seen there amazing returns over time. The it sector has always been a safe bet for the Indian investors. These companies have strong fundamentals, they make good rights, they have big clients like American banks and tech giants. Over the past 15-20 years, they’ve also been growing faster than other sector.

But now, with this tariff issue, things are looking bad. But is it as bad as the dot-com Crisis of 2001, or Financial Crisis of 2008, or even subject than covid-19? I know experts are called it a moment which is shaping the new world order. But I Think Our Companies have the ability to adapt to it.

Undrstand the Politics of it

We are still not sure, if this new tariff thing is sustainable for us themselves.

It will lead to inflation, Higher Interest Rates, Dollar Devaluation, etc.

Are domestic companies in the US ready to replace the demand gap created with China, India, Brazil, Mexico, Vietnam, Bangladesh, etc., etc. Moreover, will the US people give donald trump the time to reshape its economics amid aid these Tall Macro Concerns? Because it is going to take some years before prices may start to show stability in the us.

I don’t think so. Us’s Trade Deficit (And High Debt to GDP Ratio), Low Interest Rates, and Dollar Dominance is the US’s Way to Manage Its Its Internal Economics. Till Now (after the ww-II), it has done everything to make this the new normal for the world (especially the dollar thing). Is the us ready to give Away its dollar dominance?

Effect of tariff on Indian it companies

Let’s think about it.

If the US starts putting tariffs on Indian it services, these companies will have to pay more taxes to do business in the us that means that means that these means that will go down. To maintaain the profitability, Eventally they will have to increase their pris for their clients. But what if the clients say, “No, we’ll go to someone cheaper”? Or Worse, what if they start hiring more locent in the US instalad of outsourcing to India?

These are real passibility, and they could hurt the growth of our its companies for the next few years.

I’m not saying that they’ll shut down, far from it. Companies like tcs and infosys are too big and too smart to let that Haappen. But they’ll need time to adjust, to find new ways to grow, and to deal with this new challenge.

For us as investors, this means we might have to wait longer to see the kind of returns we’re used to.

In the past, it stocks count giving you a cagr of 15-20%. But now, with all these challenges, it might take 3-5 years or maybe even longer, before we see kinds of gains again. I think these companies will adapt, just like they did during the 2008 Financial Crisis or after the 2001 dot-com.

They might focus more on new technologies like ai and cloud computing, or they might try to get more clients from europe or even here in India. But that change won’t happen overnight. It’s going to take time.

Should New Investors Jump in Now?

What about that that who is thinking of investment in it stocks for the first time.

Maybe you’re seeing these low prices and thinking, “Is it a good chance to buy.”

You’re Not Wrong, Buying low is a smart strategy in stock investment. But you need to be ready for a long wait. If you’re someone who can hold these stocks for 5-7 years or more, then yes, this could be a good options. Companies like tcs and infosys have a strong track record. They will likely Figure out how to deal with this tariff problem over time.

But if you’re looking for quick profits in the next year or so, you might be disappointed. The market is too uncertain right now. There could be more bad news coming from the us.

What i’m Thinking about My It Basket?

As a long-term investment, I feel like we need to start asking some tough questions

• First, how are these companies going to reduce their dependence on the us? It’s great that they have big American clients, but IF 60-70% of their Revenue Comes from One Country, that’s a big risk, right? I’D love to hear tcs or infosys talk about how they planning to grow in places like europe or asia, or even here in India, where there’s so much demand for tech services Now.
• Second, I’M Curious About How they’ll protect their profitsIf tarifs increase their costs, will they be able to maintain their Profit MarginsMaybe they’ll focus more on high-value services like ai or cybersecurity, which can bring in more money.
• Third, I think we need to look at How Strong these companies are financiallyDo they have enough cash to handle a more tough years? Can they keep paying dividends to us shareholders? TCS, For Example, Has Always Been Good with Dividends. But Smaller Fast-Growing Companies Like Coforge or Persistent Systems Might Struggle If Things Get WorsE.

These are the things I’ll keep in mind. But Till then, I’ll Continue to Hold My It Basket.

Is there any hope for the future

These companies have ben through tough times Before, and they’ve always come out stronger.

Remember how they handled the shift to remove work during covid? Or how they adapted to new technologies like cloud computing over the last decade? They’re smart and also resilient. They also have people that can bring about the needed change, and their finners are also also in Decent Shape.

I believe they’ll find a way to deal with this tariff scare and come back stronger.

But for now, we need to be patient. Existing Investor or New Investor, The Next Few Years will not be easy. To buy new or to hold on to these stocks will need some conviction. Why? Because we can Always Liquidate and Re-Invest in Stable Options. But if you believe that this is just a tough phase for our companies and they will get over it, holding on to them at this state can have a Compounding Effect in Times to Come.

Keep an eye on the news, especially what’s happy in the us with this tariff policy.

I would also like to know your views about what you think about our stocks. I think, the same is also going to happy with our pharma industry. Tell me about it in the comment section below.

Have a happy investment.