European IT Demand Bolsters Indian Firms Amid Calls for US Market Recovery

Summary – Infosys, TCS, and other Indian IT companies benefit from strong demand in Europe but experts highlight the need for US sector rebounds to sustain growth.,

Article –

In mid-2025, leading Indian IT firms like Infosys and Tata Consultancy Services (TCS) experienced notable revenue growth fueled by strong demand from European clients. This increase in European business has helped these companies counterbalance slower growth in other global markets, highlighting Europe’s critical role in supporting global IT services amidst economic challenges.

Key Players and Sectors Involved

The primary companies benefiting from this trend are Infosys and TCS. They offer services to European clients across several sectors:

• Banking, Financial Services, and Insurance (BFSI)
• Retail
• Manufacturing

European organizations in these sectors have shown increased investments in digital transformation, which has driven demand for Indian IT services. Industry analysts note that while Europe is a current growth engine, a recovery in the United States (US) IT market is essential for sustained global growth.

European Response to Increased IT Investments

European economic and industry stakeholders have positively responded to investments from Indian IT companies, recognizing their role in advancing digital modernization and generating employment. According to Eurostat, the European Union’s statistical office, IT spending in member states grew robustly during the first half of 2025. EU policymakers emphasize the importance of international cooperation in IT services to maintain competitive advantages and foster innovation.

Future Outlook

Industry experts predict that Indian IT firms will continue to leverage strong European demand to sustain short-term growth. However, there is a cautious outlook due to challenges in the US market, which remains essential for the long-term recovery of global IT spending. Specifically, the BFSI, retail, and manufacturing sectors in the US are currently underperforming, potentially constraining overall growth.

To mitigate risks, both Indian IT providers and European clients are expected to:

1. Closely monitor changes in the US economic environment
2. Diversify their client bases
3. Deepen and enhance digital service offerings

Stay tuned to Questiqa Europe for more updates and in-depth reports on regional IT market trends.

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