Analysis of Trump’s Tariff Policy Impact on Infosys and TCS

Mitigation Strategies

• Infosys and TCS have ramped up hiring within the US to mitigate risks posed by Trump’s tariff policy.
• Rising costs and visa restrictions remain significant challenges for these companies.

Moody’s Warning

• Global rating agency Moody’s has warned that industries in South and Southeast Asia, particularly the automotive, steel, chemicals, and business services sectors, are most susceptible to US trade policy changes.
• The US will impose reciprocal tariffs on countries with large trade deficits, such as India, starting April 2, 2025.

Visa Dependency

• Indian IT giants like TCS, Infosys, and Hexaware Technologies rely heavily on H1B visas for skilled professionals in the US.
• In 2023, nearly 75% of H1B visas were granted to Indian nationals, highlighting their dependency on these visas.

Market Reactions

• Infosys shares traded at Rs 1,588 on March 17, 2025.
• TCS shares dropped 0.48% to Rs 3,494 on the same day.
• Hexaware Technologies’ stock remained steady at Rs 471.

Minimal Impact on Other Sectors

• Companies in the steel and chemicals sectors, such as Tata Steel and PTT Global Chemical, are expected to face minimal direct impact due to their significant revenue from Asia.

Long-Term Effects

• The reliance on H1B visas and rising costs may continue to pose challenges for Indian IT companies in the long term.
• Competitive dynamics could shift as companies adapt to stricter immigration policies and trade tariffs.