Budget cuts by US firms to hit IT revenues in FY26

The Indian IT services sector is likely to face challenges in FY26 due to increasing regulatory and economic uncertainties linked to the policies of the US administration under the presidency of Donald Trump. Analysts believe that pauses in IT budgets by corporate clients, combined with these uncertainties, could delay the industry’s recovery.

The proposed tariffs by Trump, aimed at boosting American manufacturing, could negatively affect major clients of Indian IT firms in the US, leading to reduced tech spending.