The Tariffs Missed Indian IT, But the Shockwaves Won’t

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Over the past few days, I’ve come across multiple news articles painting a rather rosy picture of the Indian IT sector in light of the new U.S. tariffs, suggesting that since services aren’t directly impacted, there’s little to worry about. On the surface, it’s a comforting narrative. But the more I read, the more it felt like a false sense of immunity wrapped in misplaced optimism. That prompted me to write this note – to clear the air, unpack the deeper implications, and bring much-needed realism to the conversation.

India’s IT services sector, which exported $205.2 billion worth of software services in FY24, may seem unaffected by the latest U.S. tariffs. The 26% hike, effective April 9, 2025, targets physical goods like electronics, textiles, and gems. But this surface-level exemption hides a deeper shift already underway in global trade and technology spending.

Tariffs rarely stop at customs checkpoints. While officially aimed at goods, they ripple across industries, business models, and budgets. And at Greyhound Research, we’ve seen this script before. What begins as a price hike on a shipping invoice often ends with enterprise clients rethinking how and where they spend their technology dollars. Indian IT firms may not be footing the tariff bill, but their customers will. When those customers face rising costs and shrinking margins, the first cuts usually fall on discretionary IT projects, transformation programs, and technology pilots.

This isn’t just about trade policy. It’s the early sign of a much larger economic realignment. This will reshape global value chains and put new pressure on India’s tech services industry to adapt or be sidelined.

A False Sense of Immunity

At first glance, the absence of direct tariffs on services might feel like a relief. With the U.S. still accounting for 54% of India’s IT services export revenue, it’s easy to assume that software, cloud, and consulting are safely insulated from the turbulence affecting physical goods. After all, these are digital offerings delivered through fibre, not freight.

But this assumption misses a critical point. The real question isn’t whether Indian IT firms are being taxed; it’s how their customers absorb the blow. Tariffs on goods create cost pressure across entire industries, especially those with tight operating margins like consumer electronics, apparel, automotive, and retail. As import duties rise, so does the pressure to cut costs elsewhere. That’s when technology budgets come under scrutiny.

The impact won’t be immediate, but it will be inevitable. Capital expenditure plans will be put on hold. Operational spending will be reassessed. And CIOs will face tougher questions about ROI, value delivery, and the necessity of long-cycle transformation programs. In a landscape where cost containment becomes a strategic priority, technology shifts from being an enabler to a line item that must earn its place.

Even before these tariffs were announced, Greyhound Research’s Global CIO Priorities 2025 study found that 68% of CIOs in globally exposed industries had signalled intent to reassess large-scale IT programs. Their concerns were largely driven by rising macroeconomic uncertainty, currency volatility, and increased board-level scrutiny on digital ROI, factors now likely to be intensified by the current trade climate.

Tariff-Exposed Industries: Mapping the IT Demand Risk

To assess the real threat posed by the new U.S. tariffs, we must look beyond macro trade flows and examine where policy meets platform. The first layer involves identifying the industries directly targeted by the 26% “Liberation Day” duties. The second—and more strategically relevant—layer is understanding which of these industries are core consumers of Indian IT services. It’s at the intersection of these two worlds that risk becomes sharply visible.

Let’s double-click on this. The U.S. tariff hikes may not directly target India’s IT services sector, but they target many industries that fund it. That’s the real vulnerability. These new duties increase the cost of Indian exports like electronics, textiles, and auto components. These sectors, while physically distant from Indian IT services, are deeply connected through global supply chains. Many U.S.-based multinationals don’t just sell in the U.S.; they source from India and its manufacturing partners.

Take, for instance, a U.S. automotive major like Ford or General Motors. While its corporate HQ and final assembly plants may be in Michigan, it often sources electronic components, software-driven dashboards, or textile-based seat materials from Indian vendors. When these inputs are suddenly hit with 26% tariffs, the cost to build each vehicle increases and sometimes significantly. This cost escalation doesn’t just hit the supply chain. It shows up in margin pressure, investor calls, and, ultimately, a reduced appetite for discretionary spending.

The IT consequence? Transformation projects like plant automation, ERP upgrades, and connected vehicle platforms—many of which are driven by Indian IT firms—are reassessed, reprioritized, or delayed altogether. Not because the tech is less relevant but because the business has to protect core profitability.

The following industry overlay, based on FY24 India export data and Greyhound Research’s vertical engagement analysis, highlights where Indian IT vendors are most exposed to downstream impacts from this tariff action:

Industry	Tariff Exposure	Risk Level
Consumer Electronics	High	High
Textiles & Apparel	High	Medium
Retail & E-commerce	Medium	High
Automotive (Parts & Components)	Medium	Medium
Industrial Manufacturing	Low-Medium	Medium

These are not marginal sectors. They are foundational to many of India’s top-tier IT contracts. Whether building e-commerce engines, deploying predictive maintenance systems, running global supply chain platforms, or integrating ESG compliance dashboards, Indian IT firms are deeply embedded in these verticals through multi-year deals and high-touch programs.

The problem is when these industries get hit with sudden cost shocks, like a steep tariff regime, technology budgets don’t just shrink; they restructure. Discretionary spending is the first to go. Large transformation programs such as SAP S/4HANA migrations, legacy platform modernization, and multi-cloud rearchitecting may be deferred, resized, or, in some cases, scrapped. Projects already in flight could face renegotiation. New RFPs may be scaled down or paused altogether.

This isn’t simply a tactical slowdown. It’s a structural reprioritization of how technology is evaluated, funded, and justified. Every dollar spent must now translate into margin recovery, operating efficiency, or regulatory compliance. Indian IT firms must prepare for this pivot, not by waiting for contracts to get cut but by reshaping their delivery and engagement models to deliver a faster business impact.

These signals are already visible. In Greyhound Research’s CEO and CFO Priorities 2025 study, over 70% of senior decision-makers cited geopolitical and trade policy volatility as one of the top three risks influencing their future IT investment posture. While these tariffs weren’t active at the time of the survey, the underlying trendline was clear: leadership teams are growing increasingly cautious of global dependencies—and are preparing to recalibrate spending accordingly.

A Lesson from History: When Tariffs Rewrote the Global Tech Playbook

If Indian IT needs a glimpse into the future, it only needs to look back. The 2018–2020 U.S.–China trade war wasn’t just about tariffs; it was a structural tremor that reshaped how and where global technology was built, funded, and deployed.

What began as a targeted escalation quickly snowballed into a broad recalibration of supply chains, capital allocation, and transformation priorities. According to the Asian Economic Policy Review, that period saw sharp contractions in electronics output and trade. Meanwhile, the Peterson Institute for International Economics reported that China’s share of U.S. imports of IT hardware and consumer electronics collapsed from 38% in 2018 to just 13% by 2022. This wasn’t a blip. It was a rewire.

As sourcing costs surged and uncertainty loomed, manufacturers across the U.S. hit pause. This was not because they doubted cloud, AI, or automation, but because the economics no longer justified the investment scale. Budgets dried up. Business cases faltered. Supply chain re-architecture took priority over platform upgrades. Transformation projects were deferred, downsized, or shelved mid-flight.

Global OEMs responded not just by bypassing China but by building resilience. They redistributed production footprints and diversified sourcing jurisdictions and inadvertently froze large-scale IT programs dependent on fragile cross-border execution. The impact on global IT services was not immediate but inevitable.

India wasn’t the epicentre of that shift, and it may not be this time either. But today, it finds itself far closer to the axis of reallocation. If the U.S. succeeds in reshoring or even partially nearshoring core manufacturing, the centre of gravity for technology spending will shift alongside the supply chain. It won’t just be about where goods are produced. It’ll be about where digital decisions are made and by whom.

The lesson, per us at Greyhound Research, is simple but urgent: services may not show up on a tariff sheet, but they are deeply susceptible to the structural consequences of trade wars. When supply chains move, capital reallocates. When capital reallocates, IT priorities get rewritten. And those rewrites don’t wait for a press release. They show up first in cancelled POs, delayed RFPs, and rescoping meetings. By the time the impact lands in quarterly earnings, it’s already too late.

Tariffs, Talent, and Infrastructure Fragility

While much of the spotlight remains on trade and tariffs, a quieter but more dangerous vulnerability is emerging beneath the surface – infrastructure fragility. India’s IT services ecosystem, especially in high-growth areas like AI, cloud, and cybersecurity, depends not just on skilled talent or scalable platforms but on a global supply of specialized hardware—servers, networking gear, GPUs, and chipsets—most of which are imported from the U.S., Taiwan, Korea, and China.

This digital engine cannot run without its physical foundation. And that foundation is under increasing strain.

In August 2023, the Indian government introduced restrictions on the import of key ICT products under HS Code 8471, covering laptops, tablets, and servers. While implementation was deferred to December 2025, the signal was clear: tighter control, more compliance, and added friction in acquiring critical tech infrastructure.

But beneath the surface, a deeper operational risk is unfolding: infrastructure dislocation. U.S. export controls on advanced chips, India’s tightening of ICT hardware imports, and the cascading impact of global tariffs on component availability are now converging. What once felt like isolated policies are now creating systemic friction across the technology supply stack.

In this environment, Indian IT service providers may be fully equipped in terms of talent, IP, and delivery readiness but find themselves stalled by infrastructure shortages. Without timely access to compliant servers, GPUs, and networking gear, even the most well-architected solutions can’t scale. The bottleneck is no longer capability; it’s availability.

This isn’t theoretical. In AI workloads, model training and inference rely on specialized GPU clusters. In a hybrid cloud, performance depends on seamless movement between on-prem and cloud resources. In cybersecurity, real-time threat detection and sandboxing depend on reliable edge computing. Without guaranteed access to high-performance hardware, delivery slows, service levels drop, and client confidence erodes.

We at Greyhound Research recommend Indian IT firms to treat this is a wake-up call. Hardware is not as a procurement problem but as a strategic dependency. In today’s services business, infrastructure is no longer just backend plumbing; it’s a frontline risk.

Will U.S. Manufacturing Rebound And Indian IT Shrink?

This is one of the long-range strategic bets buried inside the tariff playbook: by raising the cost of imported goods, the U.S. aims to reignite domestic manufacturing. If this shift gains momentum, it won’t just rewire global supply chains. It will reroute the flow of technology budgets.

Manufacturing isn’t just about factories. Modern production environments are digital ecosystems, generating demand for MES (Manufacturing Execution Systems), automation platforms, real-time analytics, industrial IoT, and edge-based control systems. And with each new plant that moves from Coimbatore to Cleveland or from Chennai to Charlotte, the gravitational centre of technology spending shifts with it.

This relocation brings with it a bundling of influence – budgetary, operational, and strategic. CIOs and CTOs closer to the new production hubs will drive technology decisions. Procurement leaders will favour regional compliance and proximity. The old arguments for offshore scale and cost arbitrage will start to look incomplete without a strong case for local presence and contextual understanding.

This doesn’t spell an existential crisis for Indian IT, but it does signal the end of the era of unquestioned dominance. Moving forward, the sector will need to demonstrate value that extends beyond price, including resilience, adaptability, and regulatory alignment. While most have already taken concrete steps to demonstrate this value and offer delivery excellence, even the latter will no longer be enough. It must be complemented by geopolitical intelligence and a nuanced understanding of supply chain dynamics.

At Greyhound Research we beleive the competition is no longer just about the cost or delivery excellence. It’s about being the smartest, most strategically integrated, and most attuned to the shifting landscape.

Global Pressure Is Mounting: Asia–LatAm Competitor Set Is No Longer Standing Still

Once seen as the unchallenged leader in offshore services, India’s IT industry no longer competes in a vacuum. Around the world, emerging hubs are building not just capacity, but compelling, context-sensitive alternatives that appeal to CIOs seeking resilience, cost balance, and geopolitical agility.

In Southeast Asia, Vietnam is rapidly expanding its playbook. What began as a manufacturing-first strategy is evolving into a tech-enabled vision, combining export incentives with aggressive digital skilling and government-backed outsourcing programs. Thailand and Malaysia are making bold moves, too, by investing in Tier-3+ data centre infrastructure and cloud hosting capabilities to attract SaaS deployments and hybrid workloads from U.S. and European clients.

Across the Pacific, Mexico is capitalizing on the structural benefits of the USMCA (United States-Mexico-Canada Agreement), offering both nearshore convenience and cost-efficient delivery. Several global BPO and IT services players have quietly scaled operations there, using it as a launchpad for North American enterprise clients looking to rebalance from Asia.

Meanwhile, Costa Rica and Colombia are carving out a differentiated niche by offering bilingual, time zone-aligned, mid-to-high complexity services under the “right time zone, right price” proposition. Their proximity to U.S. decision-makers and rising tech literacy are beginning to resonate with CIOs looking for alternatives to long-haul offshore models.

At Greyhound Research, we believe India still offers unmatched depth, maturity, and engineering scale. But in this new climate, scale alone won’t be enough. The centre of gravity in tech services is starting to decentralize. Unless Indian IT firms move beyond the comfort zone of traditional delivery and align more tightly with client-side stress – be it industry-specific margin pressures, regional compliance demands, or shifting procurement models – they risk losing relevance to smaller, faster, and closer rivals.

Timeline of Impact: When the Ripples Hit Shore

Enterprises can’t afford to wait for quarterly earnings to reveal the fallout. At Greyhound Research, our scenario modelling suggests that the ripple effects of these tariffs will move in distinct waves—each triggering specific responses across procurement, budgeting, and service demand. Here’s how we expect the impact to unfold over the next 18 months:

Quarter	Market Event	Likely Impact
Q2 2025	Tariffs go live	U.S. importers initiate rapid reassessment of sourcing strategies, vendor pricing, and landed cost models
Q3 2025	Margin pressure intensifies	Mid-market enterprises begin pausing or shelving discretionary IT projects to conserve cash
Q4 2025	Inventory depletion begins	Component shortages and procurement delays begin affecting IT infrastructure delivery timelines
Q1 2026	Contract renewals heat up	Clients renegotiate terms with IT vendors, seeking price reductions, delivery flexibility, and outcome-based pricing
Q2 2026	Budget realignments finalized	Enterprises pivot toward automation, platform consolidation, and regional delivery to manage volatility
Q3 2026	Supply chains restructured	Newly established manufacturing hubs trigger localized IT demand in North America, LatAm, and Southeast Asia

These are not speculative trends, and echo patterns observed post-Brexit, during COVID-era supply chain collapses, and in the wake of the 2018–2020 U.S.-China trade war. The timeline may vary across sectors, but the direction is clear: from disruption to deferral, from deferral to redesign.

We at Greyhound Research believe Indian IT leaders must anticipate these waves early because the market will have already moved on by the time the full impact shows up in the financials.

What Indian IT Must Do Next: Ten Strategic Imperatives

The global trade reset isn’t just shaking up manufacturing. It’s rewiring how technology is bought, deployed, and delivered. For Indian IT services providers, this is not a passing storm. It’s a structural shift. In this environment, scale and cost arbitrage are no longer differentiators. They’re table stakes. What comes next is strategic reinvention.

These ten imperatives will separate the survivors from the laggards:

1. Verticalize for Relevance – India’s IT firms must abandon the illusion that horizontal capabilities alone are sufficient. Clients facing tariff-induced margin pressure are no longer buying IT. They’re buying business outcomes. This demands a shift from generic solutions to vertical intelligence. Retail clients want insights on inventory churn and store-level conversion. Manufacturers demand visibility into downtime, throughput, and emissions. Sector fluency, not just tech fluency, is now the price of admission.

In Greyhound Research’s Global CIO Priorities 2025 study, 71% of CIOs said they prefer working with partners who can demonstrate measurable value within their industry context. Vertical solutions tied to profit centres rather than generic platform modernization will dominate future RFPs. This is not a pivot to “domain knowledge.” It’s a pivot to commercial literacy.

2. Embed Scenario Modelling into Every Deal – Global CIOs no longer want to know what you can build; they want to know what you’ve modelled. Tariff cascades, export bans, cross-border data restrictions, platform lockouts – these are now part of the client’s reality. Indian IT firms must treat scenario planning not as a sales overlay but as a core delivery capability. Every engagement must come with a playbook for disruption.

In Greyhound Research’s CEO and CFO Priorities 2025 study, 67% of respondents cited geopolitical and regulatory volatility as key risks to their digital investment plans. Clients are seeking partners who can pre-empt turbulence, not react to it. Those who arrive with models, not just decks, will earn a seat at the table.

3. Localize the Infrastructure Layer – Digital services are nothing without dependable computing infrastructure. With chip exports tightening and India’s import restrictions looming, Indian IT must build redundancy into its own infrastructure stack. That means onshore fallback systems, tighter partnerships with hyperscalers offering localized services, and embedded hardware readiness in solutioning.

In Greyhound Research’s Global CIO Priorities 2025 study, 63% of CIOs warned that infrastructure delays were already constraining cloud, AI, and edge deployments. Firms unable to ensure infra availability will be excluded from large-scale transformation bids, especially those involving mission-critical automation or AI.

4. Help Clients Navigate Their Supply Chain Transitions – As clients in the U.S. and Europe rethink their manufacturing footprints, Indian IT firms must position themselves not just as observers but as enablers. This means AI-powered supplier discovery, logistics redesign across jurisdictions, and digital compliance engines for dynamic tariffs and ESG policies. Those who help clients rewire their supply chains will lock in longer, higher-value engagements.

Greyhound Research’s CEO Priorities 2025 study found that 69% of CEOs see supply chain reconfiguration as their top strategic objective through 2026. Indian IT firms must move beyond system integration and become system architects in these transitions, embedding themselves into the client’s operating model.

5. Build Micro-Proximity Delivery Models – Offshoring everything from India is no longer viable in a world of trade nationalism and real-time compliance. Indian firms must continue to invest in micro-delivery centres across LatAm, Eastern Europe, Southeast Asia and even Tier-2 Indian cities. These centres must combine technical delivery with cultural fluency, regulatory alignment, and local presence.

In Greyhound Research’s Global CIO Priorities 2025 study, over 60% of CIOs indicated a strong preference for regionalized delivery support models that offer resilience and contextual alignment and not just low cost. Proximity is no longer about geography. It’s about relevance, readiness, and risk management.

6. Pivot from Headcount to Precision – Clients today don’t want armies; they want sharp snipers. The era of bloated 200-member implementations is over. Indian IT must continue to embrace lean, domain-rich teams empowered by proprietary IP, accelerators, and automation. Pricing must reflect outcomes, not hours. Execution must prioritize agility over scale.

Greyhound Research’s CEO and CFO Priorities 2025 study revealed that over 66% of CXOs are pushing for outcome-based pricing models and smaller, high-impact teams. In this world, expertise, not effort, is the new value metric. Firms clinging to headcount brag sheets will be left behind.

7. Productise Internal Tooling and IP – Many Indian IT firms have built brilliant internal accelerators, including code migration tools, compliance dashboards, and automation engines, but these assets remain buried in delivery orgs. The opportunity lies in externalizing them. Productize your IP. License it. Package it for demos. These are not side projects; they are your next margin driver.

According to Greyhound Research’s Global CIO Priorities 2025 study, 59% of CIOs said they’re willing to pay a premium for vendors offering productized tools that reduce implementation time and cost-to-serve. IP isn’t just a value-add. It’s a multiplier.

8. Turn ESG into a Platform Opportunity – ESG compliance is now table stakes. Clients need digital platforms that support real-time carbon tracking, labour ethics audits, and automated ESG disclosures. Indian IT firms are well-positioned to deliver this, but only if they treat ESG not as a reporting problem but as a platform opportunity that spans operations, procurement, and customer engagement.

This is strongly supported by Greyhound Research’s Global CMO Priorities 2025 study, where 61% of CMOs identified ESG transparency—not just compliance—as a critical brand differentiator. Indian IT firms that offer ESG tooling, not just dashboards, will become indispensable.

9. Rewire Talent Development with AI and Skills Graphs – The era of gut-feel workforce planning is over. With AI, quantum, cybersecurity, and blockchain talent in short supply, firms must build skills graphs powered by internal LLMs to track learning curves, readiness, and skill adjacency. Real-time talent analytics will drive faster redeployment and smarter upskilling.

Greyhound Research’s CIO Priorities 2025 study found that 64% of CIOs believe their vendors’ talent adaptability will directly influence future deal renewals. Firms that invest in AI-led talent intelligence will future-proof their delivery and win client trust.

10. Redesign Go-to-Market Around Strategic Use Cases – CIOs don’t want slides; they want proof. Indian IT firms must lead with use cases that deliver quantifiable value: “Reduce warranty claims by 20%” or “Improve shelf availability by 15%.” Sales must evolve from capability pitching to verticalized, metric-led storytelling.

This direction is validated by Greyhound Research’s Global CIO and CEO Priorities 2025 studies, where over 70% of leaders said the strongest vendor pitches are those rooted in real, live, proven outcomes—not theoretical transformation promises. GTM must pivot from generic to surgical.

CIO Playbook: Ten Ways To Navigate The Shockwave

For enterprise technology leaders, the headline is simple: just because IT services aren’t tariffed doesn’t mean your strategy is protected. The real risk lies not in the fine print of trade policy but in its second-order effects on infrastructure, supplier ecosystems, and client-side industries. To stay ahead of the curve, CIOs must move from reactive protection to proactive positioning.

The following ten imperatives are designed to guide CIOs as they navigate the cascading effects of global trade turbulence:

1. Map indirect exposure – Even if your IT vendors appear untouched by new tariff regimes, their foundations may not be. Hardware supply chains, end-customer verticals, and regional delivery hubs are all vulnerable to trade restrictions, export bans, and rising input costs. CIOs must interrogate every layer of their delivery ecosystem to understand where risk accumulates and where failure might quietly begin.

In Greyhound Research’s Global CIO Priorities 2025 study, 74% of CIOs cited third-party infrastructure and delivery chain vulnerabilities as a top operational risk. These leaders flagged dependency risks across cloud providers, hardware platforms, and regional fulfilment partners well before the current round of tariffs was even on the horizon. The signal is clear: exposure isn’t just direct; it’s inherited.

2. Diversify delivery intelligently – The traditional model of large-scale offshore delivery concentrated in a single geography is becoming obsolete. As geopolitical risks escalate, CIOs must rethink their global delivery footprint, not to abandon scale but to complement it with geographic resilience. Combining India’s engineering depth with nearshore hubs across Latin America, Eastern Europe, or Southeast Asia can reduce time-zone friction and regulatory concentration risk.

According to Greyhound Research’s Global CIO Priorities 2025 study, 62% of CIOs reported that they are already planning to diversify their delivery infrastructure by 2025. This isn’t merely about cost; it’s about continuity. Enterprises want fail-safes built into their digital backbones. Delivery diversification is no longer an efficiency play; it’s an insurance policy.

3. Run strategic value audits on your partners – CIOs must now evaluate partners not just for delivery performance but for systemic resilience. Are your vendors monitoring geopolitical shifts? Can they reconfigure delivery models rapidly? Do they have visibility into supply shocks across their own ecosystems? These questions must become part of quarterly vendor reviews, not just boardroom hypotheticals.

In Greyhound Research’s CEO and CFO Priorities 2025 study, 67% of enterprise leaders said they expect CIOs to evaluate vendors on their ability to respond to economic, regulatory, and geopolitical shocks, not just on KPIs like TCO or SLA adherence. This reframes the role of partner audits from procurement housekeeping to a core strategic function.

4. Build infrastructure friction into roadmap planning – Chip shortages, licensing delays, and import restrictions are introducing latency into transformation roadmaps. Infrastructure acquisition, especially for AI workloads, cloud extensions, and edge deployments, will no longer be a matter of lead time; it’s becoming a function of global politics. CIOs must factor in procurement volatility as part of their program design.

In the Greyhound Research Global CIO Priorities 2025 study, 63% of leaders flagged infrastructure availability as a major constraint in delivering enterprise-grade digital programs. This concern predates the new tariffs and reinforces the urgency of adopting infra-aware transformation strategies that assume delay, not speed, as a default condition.

5. Embed trade and geopolitical risk into scenario planning – Technology strategy must no longer be isolated from political strategy. From tariff escalations to semiconductor sanctions and cross-border data restrictions, macro events are reshaping the playbook for CIOs. Scenario planning must now include trade shocks, export controls, and regional regulation shifts as standard variables, not outliers.

In Greyhound Research’s CEO and CFO Priorities 2025 study, 71% of leaders ranked geopolitical risk, including trade disruption, sanctions, and digital sovereignty shifts, as a top-three factor likely to influence tech investment decisions. For CIOs, this signals a mandate to embed policy awareness into architecture, procurement, and platform roadmaps.

6. Rationalise vendor concentration – Enterprises that are overly reliant on a single cloud provider, ERP suite, or data platform face an elevated risk. One regulatory miss or supply disruption could paralyze entire digital operations. CIOs must proactively de-risk their architecture by increasing modularity, portability, and supplier optionality.

In Greyhound Research’s Global CIO Priorities 2025 study, 54% of technology leaders said they were actively reassessing platform concentration risk. Many are building exit clauses, developing secondary vendor relationships, and refactoring critical workloads to run in multi-cloud or hybrid models. In this new climate, optionality is not a luxury; it’s a survival strategy.

7. Rebalance budgets toward automation and AI Ops – When margin pressure escalates, enterprise IT must pivot from scale to precision. Manual interventions and people-heavy models are expensive and fragile under macroeconomic strain. CIOs should direct spending toward automation-led operations, observability platforms, and AI-driven service management to increase resilience without inflating costs.

Greyhound Research’s Global CIO Priorities 2025 study found that 72% of CIOs in tariff-exposed sectors planned to reallocate budgets toward intelligent automation and AI Ops. This trend reflects a broader shift from transformation as a project to transformation as infrastructure becomes self-healing, self-aware, and cost-aware by design.

8. Treat ESG tech as a strategic lever – Environmental, Social, and Governance (ESG) metrics are no longer peripheral; they’re central to enterprise credibility, especially in export-driven and investor-sensitive industries. CIOs must integrate carbon accounting, supply chain traceability, and ethics dashboards into core enterprise systems, not bolt them on as afterthoughts.

This is reinforced in Greyhound Research’s Global CMO Priorities 2025 study, where 61% of CMOs said ESG transparency would be a defining factor in brand trust and customer loyalty in the years ahead. CIOs now have a critical role in enabling the infrastructure for ESG intelligence, which includes integrating with financial systems, supplier platforms, and real-time analytics.

9. Localize digital governance frameworks – As data localization, AI regulation, and digital compliance laws proliferate, enterprises must build governance structures that flex by region. CIOs must design oversight mechanisms that enable global consistency without violating local mandates.

Greyhound Research’s Global CIO Priorities 2025 study showed that 68% of CIOs are actively working to reconfigure governance frameworks for local regulatory alignment. This includes multi-region cloud tenancy strategies, local data storage nodes, and country-specific compliance playbooks. In the new digital world order, governance is geography-aware.

10. Align the CIO agenda with business model resilience – CIOs must move beyond digital transformation narratives and focus on helping the business adapt to economic shocks, trade volatility, and supply chain fragmentation. IT strategy must now directly support go-to-market flexibility, pricing adaptability, and cost model elasticity.

In Greyhound Research’s Global CEO and CIO Priorities 2025 studies, over 65% of leaders cited enterprise adaptability, not transformation maturity, as their top priority in the face of global uncertainty. This positions the CIO as the architect not just of systems but of business resilience.

Final Word: A Stress Test for Globalization—and a Moment of Reckoning for Indian IT

At Greyhound Research, we believe this moment is far more than a bilateral trade dispute. It’s a stress test for the very foundations of globalization. A test of how interconnected, interdependent, and fragile today’s digital economies have become.

For the better part of two decades, Indian IT services firms have fuelled the expansion of global business, building the backbone of distributed supply chains, borderless platforms, and offshore delivery at scale. But that same architecture is now being shaken by protectionist winds, infrastructure volatility, and shifting geopolitical equations. The world they helped globalize is now asking to be de-risked, rebalanced, and, in many cases, re-localized.

This is not a rejection of Indian IT but a reshaping of expectations. Clients will no longer reward scale alone. They will demand foresight, resilience, and agility embedded into every service relationship. And while the latest round of tariffs may have spared Indian services on paper, the tremors they’ve triggered are real and permanent.

But then, where there is pain, there is opportunity. That’s the law of the land. Below are some avenues that we at Greyhound Research believe will be available to grab in the coming quarters:

Vertical	Pain Indicators	Opportunity Signals
BFSI	Delay in discretionary spend; localisation pressure in U.S. and EU	AI compliance, fraud detection, and GenAI onboarding in treasury workflows
Manufacturing	Tariff exposure; supply chain volatility	Plant automation, predictive maintenance, GenAI in sourcing
Telecom	Budget rationalisation; CX replatforming delays	Edge-AI deployments in 5G monetisation and customer churn prediction
Retail	Cost takeout focus; cross-border complexity	GenAI in catalogue enrichment, customer behaviour insights
Energy & Utilities	Regulatory-driven capex; digital operations in ESG tracking	Grid analytics, AI-led smart meter data ops
Healthcare	Slow U.S. public payer spend; tightening HIPAA compliance audits	GenAI in clinical documentation, claims automation, and lab analytics
Pharma & Life Sciences	High IP-sensitivity slowing AI pilots	Strong demand for GenAI in R&D productivity and patent exploration workflows

Survival will not belong to the largest but to the most adaptive. When leaders across CIO, CEO, and CMO roles already flag resilience, geopolitical agility, and ESG alignment as key priorities for 2025, Indian IT can no longer rely on its old playbook of scale and cost advantage alone. In a world where the rules are being rewritten, Indian IT must not just deliver transformation—it must embody it.