The impact of Trump-era tariffs on an Indian small IT company was indirect but still significant—especially in terms of business costs, client relationships, and global competitiveness. Here’s a breakdown of how it played out:
📌 1. No Direct Tariffs on IT Services, But Still Affected
- Trump’s tariffs mainly targeted physical goods—steel, aluminum, electronics, etc.—not services like IT.
- However, India’s IT exports are service-driven, so they were not directly tariffed, but the spillover effects were real.
📌 2. Client Uncertainty in the U.S.
- U.S. clients of small Indian IT firms (especially SMEs or startups) often tightened budgets due to increased operational costs from tariffs on Chinese and other imports.
- This meant slower project approvals, delayed payments, or even canceled contracts.
📌 3. Immigration & H-1B Visa Curbs
- Parallel to tariffs, Trump cracked down on H-1B visas—a key channel for Indian IT talent.
- Even small companies doing onsite consulting or client handholding struggled with mobility, hurting competitiveness.
📌 4. Shift Toward Protectionism
- The “America First” policy encouraged local hiring and discouraged offshoring.
- Small IT companies in India lost outsourcing contracts or were forced to set up U.S. subsidiaries, increasing their costs.
📌 5. Increased Competition
- Some U.S. companies pulled work back in-house or turned to nearshore alternatives (like Mexico or Eastern Europe).
- Indian IT companies had to drop prices or provide more value-added services to stay in the game.
📌 6. Opportunities Through Diversification
- On the flip side, some small IT firms pivoted:
- Entered non-U.S. markets like Europe, Middle East, and Southeast Asia.
- Focused on product development or SaaS models to reduce dependence on U.S. client work.
