Infosys's share price has fallen by over 10% this year. More broadly, India’s net dollar exports of IT and IT-enabled services fell by 2% year-on-year in fiscal year April 2016-March 2017 (FY17), hit by modest global economic activity and rising geopolitical risks. US President Donald Trump’s ‘America first’ rhetoric and his clampdown on professional visas has raised concerns for the Indian IT sector, which has grown rapidly to be a key engine of growth but remains dependent on US relations.
IT export sales will depend not only on global activity and US policy but also on how Indian firms adjust to US policy and global trends.
The longer-term effects of less US-India cooperation rest on India negotiating better labour mobility and supporting its skilled workers.
The authorities expect global activity to continue to pick up, supporting India’s goods exports, but US protectionism could dampen demand.
