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The Nifty IT index plunged nearly 3% in early trading on April 3 after US President Donald Trump imposed a sweeping 26% tariff on all Indian exports
Nifty IT tumbles 3% as Trump’s reciprocal tariffs spark growth concerns
The Nifty IT index plunged nearly 3% in early trading on April 3 after US President Donald Trump imposed a sweeping 26% tariff on all Indian exports.
Shares of major IT service providers, which rely heavily on US contracts for revenue, saw sharp declines. Industry leaders like Infosys, TCS, and HCL Technologies led the losses on the Nifty 50 index.
As of 9:30 AM, the Nifty IT index had dropped 2.5% to 35,360.20. Among mid-cap IT firms, Persistent Systems, Coforge, and Mphasis bore the brunt of the sell-off, tumbling as much as 6%.
The downturn stems from concerns over revenue growth, as these companies depend on US service exports for a substantial portion of their earnings. The newly imposed tariffs are expected to slow deal closures with American clients, potentially impacting the sector’s topline performance.
On April 2, President Trump announced a series of global reciprocal tariffs at a White House event. For India, he introduced a 26% levy, calling it a “kinder” measure despite previously labeling India as a “tariff king” and a “tariff abuser.”
International brokerage firm Morgan Stanley warned that global macroeconomic shifts and technological disruptions pose increasing risks to India’s IT sector, potentially affecting both valuations and revenue growth.
Amid mounting concerns over a US economic slowdown and its impact on Indian tech firms, IT stocks have been underperforming. Fears over tariffs have fueled a broad sell-off in the sector. Over the past month, the Nifty IT index has declined 6%, and over the last six months, it has plunged 15%, wiping out significant investor wealth.
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