IT cos will need to invest more in US-based services

WITH the concerns growing about effects of US President Donald Trump's proposed tariffs, experts say the IT services industry is not an exception as the US is always a major destination and that they need to invest more in US-based services in order to avoid tariffs.

- UMA KANNAN @ Bengaluru

They say significant tariffs placed on services could disrupt the IT services trade.

Phil Fersht, CEO of HFS Research, told this newspaper there will be pressure on the Indian government to lower trade barriers for US firms to create parity. "Currently, India's tariff rate on US goods is 9.5% against only 3% in Indian goods, namely cars, textiles, steel and pharmaceuticals," he said.

He expects "IT services contracts are likely to have a similar 9.5% tariff on them by the US, it could be even as high as 20% depending on government policy, which is highly unpredictable."