Trade Wars Emerging as IT's Biggest Challenge for Now

Coforge becomes the latest IT co to highlight tariff-related uncertainties as a risk to business

- Jas Bardia

Coforge Ltd has become the seventh major Indian IT services firm to flag global trade wars as a significant business risk, coming in the backdrop of US President Donald Trump's ire towards Prime Minister Narendra Modi's bonhomie with his Russian and Chinese counterparts.

Coforge is the latest among the country's largest software service providers, including HCL Technologies Ltd, Wipro Ltd, Tech Mahindra Ltd, LTIMindtree Ltd, Mphasis Ltd and Hexaware Technologies Ltd, to address tariff-related uncertainties as a risk to business. This implies that tariff disputes are emerging as the single biggest challenge for India's largest tech services companies.

When countries impose tariffs on imports from other countries, companies that count IT services companies, including Coforge, as their IT vendor, face the heat. Running their daily business becomes a hassle. The costs of sourcing raw materials increase, and in such instances, they have to pull back their tech spending.