Elon Musk’s DOGE increased the problems of Indian IT companies; shares fell heavily, know

New Delhi. The US Government’s “Department of Government Efficiency” led by Elon Musk has taken several steps regarding cost reduction. It is being said that these steps may affect the giant companies of Indian IT sector like Tata Consultancy Services (TCS), Infosys, Wipro and others. Analysts have warned that these cuts may have a negative impact on the growth and revenue of Indian companies, especially when there is already an atmosphere of recession and uncertainty globally.

Indian IT companies are already going through a tough phase this year and now analysts believe that the expected improvement is not possible even in FY 2026. According to a Reuters report, this pessimistic outlook comes after Accenture’s recent quarterly report, which indicated weakness in discretionary spending and aggregate demand.

IT index falls 15.3%
According to a Times of India report, the Indian IT index has declined 15.3% so far this year and is heading towards its worst quarter since June 2022. During this period, shares of major companies like TCS, Wipro, Infosys and HCL Tech have fallen by 11.2% to 18.1%.

What did the Accenture report say?
Global IT services company Accenture is considered a leading indicator for the Indian IT industry. It said in its recent report that spending on discretionary projects has become “limited” and no significant increase is being seen in client budgets. Accenture CEO Julie Spelman Sweet also cited US administration policies. He said, “The new government is trying to make federal spending more efficient, which has slowed down many new procurement processes. This has had a negative impact on our sales and revenue.”

Uncertainty and trade tensions in the US market
The US market is extremely important for Indian IT companies. But the new tariffs imposed by the US recently and global trade tensions have further increased the uncertainty. According to Amit Chandra, Deputy Vice President, HDFC Securities, “What has happened in the last two months has increased uncertainty about the first half of FY 2026, which may affect the recovery of IT companies.”

Warning from Kotak and Citi Research
Analysts at Kotak Institutional Equities said that “sluggish demand in FY 2025 and slow pace of large deals may limit revenue growth in 2026.” Apart from this, the impact of the early stages of Gen AI can also pose new challenges for companies.

Citi Research has estimated that the revenue growth of Indian IT companies will be just 4% in FY26, which will be the same as in FY25. However, he also said that Indian IT companies will have limited direct impact from the recent US policies, but due to this competition in other sectors may increase.

Signs of improvement in banking and healthcare sector
According to some analysts, there were signs of improvement in the banking, financial services and insurance (BFSI) and healthcare sectors, but due to recent uncertainties, many companies are adopting a “wait and watch” policy. This may affect the growth of IT companies.

Meanwhile, Musk’s DOGE initiative is also getting support. Supporters say that this is a necessary step to control federal spending, which can help reduce America’s rising debt. But for the Indian IT sector, this may prove to be a double-edged sword, as while cost cuts may create some opportunities, it may also increase the risk on existing projects. Analysts have advised investors to be cautious. He says the situation will become clearer in the coming months, when the full impact of DOGE’s policies will be revealed. Until then, Indian IT companies will need to be flexible in their strategy and look for new opportunities.