Trump's Return May Spur Growth for Indian IT Services, GCC Sector Indian IT services companies like Tata Consultancy Services (TCS), Infosys, Wipro, and HCLTech get a lion's share of their revenue from US clients and any uptick in client spend directly boosts their topline.
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The return of President Donald J. Trump to the Oval Office may spur growth for the Indian IT services sector as well as the global capability centres (GCCs). While the IT services sector is upbeat on greater client spend, more GCCs are expected to be set up in India to tap into the talent pool.
Indian IT services companies like Tata Consultancy Services (TCS), Infosys, Wipro, and HCLTech get a lion's share of their revenue from US clients and any uptick in client spend directly boosts their topline. While there have been concerns on Trump's immigration policies, the localisation strategies of the Indian IT companies will help offset any possible tougher work visa policies.
"The Trump administration's first term reshaped the Indian IT sector, fostering resilience and adaptability. H-1B visa restrictions led Indian IT companies to pivot to US hiring, creating over 175,000 jobs by 2019 and expanding local investments. This shift, though challenging, strengthened the sector's ability to meet client needs onshore, while growing demand for digital transformation in North America provided opportunities for Indian IT firms to lead in modernization and innovation efforts," said Neeti Sharma, CEO, TeamLease Digital.
"We may see mixed effects on India's economy. Stricter visa rules could impact Indian IT professionals in the US, but his push to reduce reliance on China might open doors for Indian industries like tech, pharma, and manufacturing. Meanwhile, the growth of American global capability centers or GCCs in India is likely to continue, as US companies increasingly invest here for skilled talent and strategic offshore operations," Sharma added.
President Trump's pro-business policies are expected to further strengthen the US-India alliance, driving increased investments and favorable trade dynamics as the demand for a skilled Indian workforce continues to grow in industries pivotal to the digital economy.
"A key area of expansion lies in the growth of global capability centers or GCCs, with numerous US companies eager to tap into India's skilled labour pool, setting the stage for job creation and reinforcing India's standing as a global talent hub," said Ramesh Alluri Reddy, CEO, TeamLease Degree Apprenticeship.
Data reveals that US exports to India saw an 84 per cent increase from USD22,105.7 million in 2012 to USD39,817.4 million in 2021, while imports from India surged by approximately 81 per cent, from USD40,512.6 million to USD73,308.2 million over the same period.
"Notably, trade between the two countries grew robustly from 2017 to 2021 during Trump's previous presidency, underscoring the potential for another era of strong trade expansion. This momentum is further bolstered by the influential Indian diaspora, which continues to elevate India's standing in the US. As Trump's administration seeks to deepen economic ties, India has the potential to support these efforts by bridging skill gaps and enhancing workforce readiness, ensuring young talent is prepared to meet rising demand," said Reddy.
IT industry apex body Nasscom said it looks forward to working closely with the new US Administration to strengthen the dynamic tech partnership between our two nations. "As the largest and oldest democracies, we look forward to collaborating on various areas including AI and cybersecurity. Nasscom remains committed to advancing this collaboration for a democratic, inclusive and sustainable innovation ecosystem."
The tech sector is the key "lynchpin" of the US-India bilateral engagement, said Nasscom. "The US is the largest market for India's $254 billion tech sector where its overall contribution is $80 billion to US GDP. Importantly, the industry plays a key role in supporting US companies in strengthening the US economy. Conversely, India is a prime destination for American businesses, with over 1,000 US companies that are driving innovation and leveraging India's digital infrastructure to create competitive solutions," it said.
