Trump's Pro-Business Approach and Its Impact on India's IT Sector

By Haripriya Suresh and Sai Ishwarbharath B

BENGALURU (Reuters) – Donald Trump's presidency is expected to be "pro-business and pro-growth," favoring the tech services industry, according to Wipro's Executive Chairman Rishad Premji at a Bengaluru event on Tuesday.

Indian companies and investors are closely monitoring Trump's return to the White House to evaluate how his policies affect the country's $254 billion IT services sector.

Premji emphasized that discussions around lower taxes and relaxed regulations could create a positive environment for businesses and influence spending habits.

> "The government is very pro-business and pro-growth, which helps all of our customers and partners in India and worldwide," he stated, highlighting potential corporate tax cuts and streamlined regulations.

This optimism follows a series of challenging quarters for IT service firms, which faced reduced client spending, particularly on non-essential projects amid macroeconomic uncertainties and inflation.

Premji warned that the IT sector must remain cautious regarding inflation concerns, especially related to tariffs and evolving immigration policies.

Tighter U.S. outsourcing regulations and H-1B work visa restrictions may pose challenges for India's IT industry, which significantly depends on the U.S. market, as noted by CareEdge Ratings.

> "Indians receive the highest number of work visas from the U.S., primarily for the IT sector," they added.

The IT sector's revenue relies heavily on U.S.-based clients. JPMorgan's analysis earlier this month indicated that the overall impact of Trump's second presidency on India's IT sector is likely to be "positive."

> "With potential extensions and enhancements of U.S. corporate tax rates, we could see a rebound in enterprise technology spending," the brokerage noted.