Indian IT sector's growth remains stagnant through 2026

India's information technology sector is facing challenges that may hinder its recovery in the upcoming fiscal year 2026. Analysts predict the industry will continue to struggle due to weak demand and reduced spending by clients, especially in the United States. Accenture, a leading global IT services company, recently reported disappointing figures. It indicated that spending on discretionary projects remains low and there is no significant increase in client budgets. This situation raises concerns as the U.S. is a crucial market for Indian IT firms. Global trade tensions, especially after the U.S. imposed new tariffs, are adding to the uncertainty. According to Amit Chandra from HDFC Securities, the current climate makes it hard to predict how the early part of fiscal 2026 will unfold for the sector. So far this year, India's IT index has dropped by 15.3%, marking the worst performance since June 2022. Major companies like TCS, Infosys, and Wipro have seen their stock prices fall between 11.2% and 18.1%. Analysts from Kotak Institutional Equities say that weak demand and fewer large contracts will lead to lower revenue growth for major Indian IT firms. Citi Research estimates that these companies could see a 4% revenue growth in fiscal 2026, the same as in the previous year. While sectors like banking and healthcare show some signs of recovery, recent uncertainties are leading many clients to be cautious and delay spending. Accenture noted an increase in contract delays and cancellations, which might increase competition for Indian IT companies in other areas.