Last updated:
Elon Musk Doge Impact: Indian IT companies have been affected by the command of Elon Musk. In the report of the Accenture, the decrease in demand of IT companies and a decline in spending have been said. At the same time, many analysts are big …Read more
Alan Musk's dose has created panic these days including America. (File photo- x)
Highlights
- Alan Musk's footsteps affected Indian IT companies.
- The demand and expenditure of IT companies declined.
- The IT index has fallen 15.3% so far this year.
Alan Musk… This name has created panic these days including America. Donald Trump gave the command of Doge to Tesla Chief after becoming the second President of America. The job of this newly constituted department is to improve government functioning and reduce its expenses. However, the steps taken by Musk under the dose initiative have proved to be tension for Indian IT companies. At the same time, some analysts are also seeing it as a recession in the IT sector.
This has been challenging for Indian IT companies already and now analysts believe that even in the financial year 2026, the industry will not get the expected improvement. According to a report by Reuters, the recent quarter report of IT veteran Accenture has highlighted the decline in demand and decline in discretionary spending.
The Indian IT index has fallen by 15.3% so far this year and it is going to prove to be its worst quarter after June 2022. Shares of major IT companies TCS, Wipro, Infosys and HCL Tech have fallen from 11.2% to 18.1%.
Accenture became 'first victim of tech sector'
Accenture, considered a global giant in the IT service sector and an indicator of the Indian IT industry, said in its report that clients are avoiding spending on new projects and there is no significant increase in their budget.
Julie Spelman Sweet, CEO of Extense, also described the policies of US administration as a reason for this recession. He said, 'The federal region makes about 8% of our global income and 16% of the total income of America. The new government is cutting government spending to increase efficiency, which has slowed down the pace of new projects.
Global trading stress will recover and difficult
According to the report, business tension has deepened due to increasing American tariff, which has increased the possibility of recession in the US market. The US is the largest market for Indian IT companies, and the uncertainty there is directly affecting India's IT sector.
Amit Chandra, Deputy Vice President of HDFC Securities, said, “Whatever has happened in the last two months, it has increased more uncertainty about the first half of FY 2026. This may reduce the recovery of the IT sector further.”
Generative AI will also become a challenge
According to analysts of Kotak Institutional Equities, the speed of large deals will be weak in FY 2025, due to which IT companies may face additional revenue reduction in financial year 2026. Apart from this, the introduction of Gen AI at the initial level can also become a challenge for Indian IT companies.
Which sector is showing signs of recovery?
Although there were indications of recovery in areas such as banking, financial services and insurance (BFSI) and healthcare, recent instability has also put customers in 'Weight and Watch' mode in these sectors.
According to the report, city research estimates that the income of IT companies covered may increase by 4% in FY 2026, which will be equal to FY 2025. Analysts said that Indian IT companies have a limited stake in the global recession, but due to this, competition in other areas may increase further.
