Indian IT stocks dropped on May 30 after a US appeals court reinstated Trump-era tariffs. Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Tech Mahindra all lost up to 2% in intraday trade. The Nifty IT index slipped nearly 1%.
This court decision temporarily reversed an earlier ruling that had blocked the tariffs. In short: the tariffs are back—at least for now.
So, what does this mean for the average Indian investor or IT employee?
It’s bad news. These tariffs make it harder and more expensive for US companies to rely on foreign IT services. That means potential budget cuts, fewer outsourcing contracts, and tighter tech spending. In plain terms, if you work in Indian tech or invest in it—expect a bumpier road ahead.
Markets had just begun to cheer after the US Court of International Trade had struck down most of the tariffs earlier this week. That ruling had boosted investor confidence across global IT counters. But Thursday’s legal twist reversed that optimism.
The US appeals court issued a stay, allowing the Trump tariffs to stand temporarily while legal battles continue. If the Biden administration fails to overturn this, the issue could land in the US Supreme Court.
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Brokerage warnings follow close behind.
Bernstein downgraded Indian IT to “equal weight,” citing renewed fears of a US recession and dampened discretionary spending. In other words, American companies may start tightening their tech budgets, especially with uncertainty over tariffs looming again.
Nomura offered a similar view. It said Indian IT services are among the most exposed to these trade developments. The sector’s close ties to the US economy make it highly sensitive to political shifts like this one.
The tariffs, once sold as “Liberation Day” policies by Trump, were meant to boost American industry. But for the global tech economy, they were more of a wrecking ball. And with their sudden return, India’s $250 billion IT sector is bracing for impact.
Investors and employees alike are left in limbo, waiting for the next ruling—and hoping cooler heads prevail.
As the legal back-and-forth continues, so does the uncertainty. Indian IT isn’t out of the woods yet. It’s just stuck in a forest of US courts and political games.
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