New Delhi: Hours after US President Donald Trump spelt out his ‘America First’ strategy, he also belted out Frank Sinatra’s “My Way”, sending out a worrying message for the Indian economy, specially the IT sector. Domestic financial markets are bracing for a fresh round of volatility when they open on Monday.
Trump’s maiden presidential address on Friday has unnerved India’s biggest export industry — IT services. Close to 75% of the industry’s $150 billion revenue comes from exports, and 60% of those exports are to the US.
Trump’s ‘Buy American, Hire American’ campaign has the potential to hit the industry hard as US companies could slow down their IT outsourcing to foreign (primarily Indian) companies, squeezing margins. Pharmaceuticals is another sector that is jittery as Trump has vowed to force the US drug industry to produce at home and cut prices. While it is too early to assess the impact of US protectionist policies, it is clear that any upheaval in the global economy will make a dent in India’s economic growth which is expected to slow down to 7.1% in 2016-17.