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IT: US–India Trade Deal to boost business environment

ICICIdirect Research 19 Feb 2026 DISCLAIMER

Even though IT services aren’t directly linked to tariffs, a reduction in trade friction improves the overall business environment and reduces geopolitical uncertainty for US clients. Thus, the US–India trade deal is sentimentally positive for Indian IT.
The biggest impact is likely on decision-making cycles. US enterprises which contribute majority of revenues for Indian IT (~60%), may now move faster on technology spending after months of delays caused by tariff uncertainty and macro concerns.
Large deal closures, which were getting pushed out, could see gradual revival. This should improve deal visibility and pipeline conversion over the coming quarters rather than triggering an immediate demand surge. Midcap IT firms could also benefit given their higher exposure to discretionary spending and digital transformation budgets in the US market.
The agreement also reinforces the strategic partnership between India and the US, which supports long-term trends such as GCC expansion in India, AI adoption, and increased ER&D outsourcing.
That said, the deal is unlikely to drive immediate revenue acceleration or margin expansion. Instead, it strengthens India’s positioning as a trusted technology partner and supports a more constructive demand outlook with deal flows improving and leading to better revenue conversions in the medium to long term.
Infosys management while acknowledging that AI adoption is faster than the earlier tech transitions, outlined that modernisation of legacy systems would be a key area for demand for IT services industry. Furthermore, given that enterprises prefer proprietary agentic layer on top of the foundational models, the role of IT services companies will remain meaningful.
Infosys currently provides AI services to 90% of the Top 200 clients and overall, AI revenues form 5.5% of the overall revenues in Q3FY26.  Infosys vision is to be the leading partner to unlock AI value and deliver business outcomes in revenue growth, cost optimization and innovation
The overall opportunity from AI will be from areas such as AI Strategy and Engineering, making enterprise data ready for AI models, Reimagining core business processes using agents, Agentic Legacy Modernization, Design products and embed AI in physical devices and ensuring responsible and secure AI. The AI first services (mentioned above) opportunity would be $300-400 bn by 2030.
The management also outlined that talent demand is pivoting from legacy roles to high-growth AI skills. Thus, while 92 million traditional jobs will be displaced, 170 mn new jobs will be created globally
Stocks to benefit – TCS, Persistent systems, LTIM

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