This study aims to examine whether economic policy uncertainty (EPU), market volatility, global uncertainty and broader market movements affect India’s IT sector consistently with the conventional adverse benchmark, or whether the sector exhibits a distinct response conditioned by export orientation, intangible-capital intensity and operational flexibility.
Using 201 monthly observations (April 2008–December 2024), an ARDL bounds-testing framework estimates long-run and short-run relationships between Nifty-IT, India’s EPU index, India VIX, Nifty50 and GEPU, with extended-sample robustness to December 2025 (n = 213).
Domestic EPU exerts a positive and significant long-run association with Nifty-IT, indicating policy uncertainty is not uniformly adverse. Nifty50 shows a strong positive long-run effect with above-unity elasticity. Market volatility displays temporal asymmetry: the long-run VIX coefficient is positive in the primary sample but regime-conditional, while short-run lagged terms are individually negative but not jointly significant. GEPU is insignificant in the primary-sample long run but emerges as a significant negative long-run driver in the extended sample, suggesting that global uncertainty exposure is conditional rather than permanently absent.
Institutional flexibility and service-sector adaptability matter alongside uncertainty reduction. Domestic EPU is associated with long-run IT sector strength, but volatility and global uncertainty require horizon-specific risk assessment.
The average negative effect of uncertainty is conditional rather than universal. India’s IT sector represents a plausible boundary case in which EPU, market volatility and global uncertainty affect performance through different channels and horizons.
