India’s biggest software export firm, Tata Consultancy Services (TCS), has expressed increased worry about the effect of rising U.S. trade tariffs on its global client base, especially in retail, travel, and auto segments. Clients in these categories are becoming increasingly vulnerable to economic instability due to Washington’s recent tariff policies and may soon resort to belt-tightening and paring down technology spends, CEO K. Krithivasan said.

In an interview with Reuters, Krithivasan pointed out that while some verticals in TCS’s customer base are preparing for possible disruptions, the banking and financial services industry that accounts for almost a third of the company’s revenue is relatively shielded from the trade-related headwinds.

Retail and Travel on the Frontlines
Krithivasan said the retail and tourism sectors are the most exposed companies because they heavily depend on cross-border supply chains, discretionary spending by consumers, and imported materials or parts, all of which are vulnerable to new U.S. trade policy measures.

The ripple effect of tariffs would catch operating margins and make these businesses reconsider their IT budgets,” he said. “If uncertainty lasts, we foresee some clients push back on digital transformation projects, put hiring freezes in place, or renegotiate outsourcing contracts.

TCS is servicing several top retail brands and air carriers across North America and Europe. Given consumer confidence being already strained and the cost of shipping increasing, the company also sees a spell of restraint on spending from such segments, most notably in the U.S., where the pro-globalization policies during the Biden years have been succeeded by Donald Trump’s more protectionist approach in his second term.

Specifically, electronics, car components, and consumer item tariffs are most likely to filter through to companies that rely on overseas suppliers. The additional expenses may not only put a squeeze on profitability but also divert attention from innovation to efficiency of operations.

Automotive Industry May Rein In Expenditures
The automobile sector itself is also starting to feel the pinch, adds Krithivasan. “Automaker and supply chain partners are following developments closely. Tariffs on components or raw materials make manufacturing more expensive, particularly for electric vehicle manufacturers that rely on international sourcing of electronics and batteries.”

TCS delivers software solutions throughout the automotive lifecycle—from autonomous driving platforms and embedded systems to customer experience solutions and supply chain optimization. Any slowdown in this market could temporarily stall project pipelines.

Banking Sector: A Stable Revenue Anchor
Despite looming worries in other areas, Krithivasan assured that TCS’s core business—banking and financial services—is not impacted as of now. “There’s relatively low direct exposure to tariff volatility in BFSI (Banking, Financial Services, and Insurance), and digital transformation continues to be a priority there.”

In recent years, TCS has accelerated its engagement in cloud modernization, cybersecurity, and AI services for large banks globally, assisting them in remaining agile in the face of evolving regulatory environments and customer needs.

This segment accounts for about 32% of TCS’s revenue and is also less dependent on physical goods or cross-border trade, allowing it to be somewhat insulated against the kind of volatility that ails sectors like retail and manufacturing.

Cost Management likely to Redefine Tech Expenditure
Although the ultimate effect of US tariffs would take time to realise, TCS already is encouraging clients to proactively and strategically approach cost management. Krithivasan made it clear that most companies are not in the mood to start discarding their technology spends but need to reprioritise them.

“Clients still understand the value of digital transformation. But what we’ll see is a shift from large, capital-intensive programs to smaller, more ROI-focused projects,” he said.

This trend could benefit Indian IT firms that offer flexible, modular services and the ability to scale operations quickly. It may also open doors to automation and AI adoption as companies look to reduce dependence on expensive human capital and physical assets.

Navigating Uncertainty: TCS’s Global Strategy
TCS, which has a presence in more than 45 countries and has over 600,000 professionals, is sticking to its long-term strategy in spite of these macroeconomic headwinds. The company is double down on innovation, client co-creation labs, and skilling its people in next-gen technologies such as generative AI, quantum computing, and sustainable technology.

Krithivasan concluded on a note of guarded optimism: “Economic cycles come and go. Our job is to help clients navigate uncertainty while staying future-ready. TCS will continue to invest in talent and technology to be the transformation partner of choice.”

Conclusion: Sector-Specific Risks Demand Strategic Agility
As global trade policy becomes more and more unpredictable, TCS’s exposure to tariff-sensitive industries such as retail, travel, and autos will require adaptability and client-centric strategy. While the banking industry continues to offer stability, increasing volatility in other sectors can result in tightening the purse strings and reprioritizing spending on technology.

The firm’s unblinkered view of sectoral risks, its diversified client base, and international reach equip it to ride out the storm. But success will be contingent on its capacity to evolve rapidly, to add value, and to serve clients through what could be a protracted cycle of economic uncertainty and policy-induced disruption.