President Donald Trump has introduced new trade measures, imposing a 10 per cent baseline tariff on all imports and a 26 per cent levy on Indian goods entering the US. These tariffs, justified by claims of unfair trade practices, could significantly impact India’s economy.
A report by Emkay Global suggests that a 25 per cent broad tariff could lead to a loss of $31 billion from India’s GDP, accounting for nearly 0.72 per cent of the total. The US remains India’s largest export market, with total exports reaching $77.5 billion in FY24.
Speaking at the “Make American Wealthy Again” event, Trump stated, “India very, very tough. The Prime Minister just left and is a great friend of mine, but you are not treating us right. They charge us 52 per cent and we charge them almost nothing.”
IT Sector Faces Hiring Slowdown Amid Tariff Uncertainty
Beyond trade, India’s IT sector—one of the biggest service exporters to the US—is beginning to feel the heat. The sector is already experiencing a weak hiring environment, and further tariff-related cost escalations may worsen the situation.
According to Emkay Global, hiring in IT services has remained stagnant. The Naukri JobSpeak Index declined by 2.5 per cent year-on-year and 8 per cent month-on-month in March 2025. The BPO/ITES sector also saw a 7.5 per cent year-on-year drop, indicating a slowdown in job market recovery.
With economic uncertainty looming, large IT firms such as TCS, Infosys, and Wipro have adjusted hiring plans. TCS is expected to onboard 40,000 freshers in FY26, followed by Infosys with 20,000 and Wipro with 10,000-12,000. However, discretionary spending cuts may further strain the sector.
Could This Lead to India’s Biggest IT Layoffs?
Industry leaders have raised concerns over mass layoffs if tariffs extend to software imports. Rakesh Nayak, an IT entrepreneur, warned that a 20 per cent tariff on Indian software could force his company to shut down operations in India.
Another industry veteran called it “the biggest ever downturn,” comparing it to previous financial crises like the dot-com bust and subprime mortgage crash.
A Domino Effect on India’s Economy?
Job losses in the IT sector could have wider economic consequences, affecting consumer spending, foreign capital inflows, and remittances. Experts warn of a potential repeat of past financial crises, but on a larger scale.
As India braces for the impact, IT firms and policymakers must devise strategies to navigate this economic storm. The big question remains: How will India respond to this growing trade war?
