Other markets remain in the 1-3 per cent GDP growth range and do not emerge come across as significant alternatives to the US
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Even as the US market — accounting for roughly 65–70 per cent of India’s IT export revenues — remains critical for the sector, leading Indian tech firms are looking to expand into other geographies amid economic uncertainties.
Analysts argue that rather than retreating, companies should double down on client centricity and redefine account strategies around speed and pricing flexibility. If the tariff war intensifies demand pressures, companies swiftly realigning with US clients’ reprioritised spending agendas will outpace slower rivals, while also eyeing growth opportunities in Japan, ASEAN, West Asia, and Europe.
Forrester projects that the US will account for nearly 55 per cent of the Global IT spending, or $2.7 trillion of the total $4.9 trillion worldwide in 2025. The proportion of this spending is unlikely to decrease anytime soon.
Ashutosh Sharma, VP and Research Director, said, “The problem is, there aren’t any other major markets to diversify into. The tech spending of a country correlates highly with its GDP growth. Europe, while being the second largest market, is besotted with multiple economic slowdowns, with the GDP of key markets such as Germany, France, and Italy poised to grow at less than 1 per cent.”
Limited alternatives
Other markets remain in the 1-3 per cent GDP growth range and do not emerge as significant alternatives to the US. He continued, “The only major driver of tech spend in the absence of geopolitical risks such as wars or tariff regimes is the adoption of AI by enterprises. In that area too, the US is in a much better position compared to a highly regulated EU. APAC will continue to grow at a faster pace, but its overall size from an IT spend perspective still does not position itself as a significant region.”
Strategic Persistence
Nitin Bhatt, Technology Sector Leader, EY India, said, “Companies should not scale back from the US market. Rather, they should double down on client centricity and reframe their account strategies accordingly. Should the tariff war worsen demand contraction, tech players who can quickly align with their US clients’ reprioritised spending agendas will be better off than competitors who can’t do so. Speed, solution innovation, and pricing flexibility would be key to winning. That said, tech services companies should also explore geographies such as Japan, ASEAN, West Asia, and Europe to widen their market reach and capture new revenue pools.”
During the company’s Q4FY25 earnings conference call, Infosys CEO and MD Salil Parekh highlighted that while it is looking to strategically expand into Australia and Japan on the back of an acquisition and joint venture respectively, it is also committed to expanding into the US market, which accounted for 57.1% of its export revenues towards the end of FY25.
During the Q4 earnings conference call, TCS CEO K Krithivasan called out that despite the delays in decision-making and project starting concerning discretionary investments, its major geographies exhibited growth. Sequentially, North America and the UK grew by 0.2% and Europe grew by 1.2 per cent.
“From a North American perspective, it’ll be our main geography, almost like a home market for the foreseeable future, because there are large enterprises to invest in technology. We find greater opportunities for us to participate in those technology transformations.”
Published on April 22, 2025
