The Indian IT industry, which generated revenue of $254 billion last year, sees no trouble in Donald Trump return to power after a four-year gap. Despite challenges faced during Trump’s previous administration, the industry is now more stable, reducing its reliance on H1B visas and building capacities to become a global hub for Global Capability Centres (GCCs).
The US is the biggest export market for the Indian IT industry. It contributes about 55 per cent of the country’s overall IT-BPM exports of $200 billion.
To reach $300 billion by 2030, the industry believes it has evolved to a point where it is less dependent on H1B visas. Following the election, the industry anticipates that political stability in the US, will lead to a more robust US economy and increased IT spending. The US remains the largest market for the Indian IT industry, which clocked IT exports of about $200 billion last year.
The National Association of Software and Services Companies (Nasscom) has 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 in various areas, including AI and cybersecurity.
“The US is the largest market for India’s tech sector, contributing $80 billion to US GDP. Over 1,000 US companies operate in India,” it said.
While Trump’s stance on immigration and outsourcing was previously a concern, industry experts believe the current situation is different. B V R Mohan Reddy, former Chairman of Nasscom and Executive Chairman of Cyient Limited, stated that Indian companies have progressed in both service delivery and hiring local talent for specific roles.
“We don’t depend much now on H1B visas. The Indian companies have graduated into the next level – not only in delivering services but also in attracting and finding the local employees for certain jobs,” he said.
“We also emerged as a global for Global Capability Centress which is encouraging more and more US companies to set up their GCCs in India,” he said.
While his opposition to immigration from South America and to low-end jobs given to outsiders, Trump’s views on people with good education augur well for India, he said.
Additionally, the industry is optimistic about the potential for improved bilateral trade due to the positive relationship between Trump and Indian Prime Minister Narendra Modi. Market analysts also suggest that the potential for Trump’s return has already been factored into the IT sector’s performance.
Narendra Solanki, Head of Fundamental Research - Investment Services at Anand Rathi Shares and Stock Brokers, stated that the market has already priced in this possibility, and any immediate volatility is unlikely. The focus will likely shift to broader macroeconomic factors and sector-specific drivers as the situation progresses.
“Until the new policies are in place, it’s hard to predict the full implications, but I remain cautiously optimistic,” he said.
Ganesh Natarajan, former Chairman of Nasscom, felt that Trump’s victory would be positive for Indian markets. “A strong leader emerging victorious is good news for the IT industry. It will help in the effective implementation of policies,” he said.