West Asia conflict's short-term impact will be modest-to-none for IT firms

The short-term impact will be modest-to-none, Peter Bendor-Samuel, Founder and Executive Chairman of Everest Group, said.

For Indian IT services firms, West Asia is a significant market, primarily driven by digital transformation initiatives. From TCS, Infosys, Wipro, to HCLTech, these firms have expanded their footprint and established a strong presence, with growth centred around AI-driven cloud transformation projects. Experts said that though the short-term impact from the ongoing conflict is none, as there would not be any major change in client spending, long-drawn tensions could impact firms, as there will be a slowdown in discretionary spending.

The short-term impact will be modest-to-none, Peter Bendor-Samuel, Founder and Executive Chairman of Everest Group, told DH.

"If the war drags on and it drives up the price of oil, which keeps inflation elevated, it will slow down the economy, which will impact them," he said.

West Asia has been one of the few bright spots for growth. "However, these relationships and the revenue from them will not be materially affected in the short-run. But in a long war, these could be negatively-affected," he said.

With ambitious national transformation agendas such as Saudi Arabia’s Vision 2030 and the UAE’s Digital Economy Strategy, governments and enterprises across the region are investing heavily in AI, cloud infrastructure, cybersecurity, and digital public services. These initiatives are creating significant opportunities for Indian IT firms that have long been trusted partners in delivering large-scale technology transformation programs globally, Ankush Sabharwal, Founder & CEO, CoRover, said.

Industry estimates suggest West Asia contributes roughly 8-10% of revenues for many large Indian IT services firms, while the region’s enterprise technology services market is projected to exceed $20-25 billion in the coming years. Indian companies are playing a vital role in sectors such as banking, telecom, energy, government services, and smart city initiatives, supporting mission-critical digital infrastructure, Sabharwal added.

According to him, while geopolitical developments in the region can create short-term uncertainty in global markets, Indian IT companies are structurally-resilient due to their diversified client portfolios, global delivery capabilities, and strong long-term enterprise relationships. Their deep expertise in emerging technologies such as AI, automation, data platforms, and digital governance solutions positions them well to support the region’s long-term economic diversification goals.

Indian firms deploy thousands of engineers, project managers and domain specialists onsite across the region. "Escalations can disrupt visa processes, travel routes, employee safety protocols, and family relocation plans. Even where projects continue, uncertainty increases stress levels among expatriate employees. In such moments, HR teams must activate mobility risk frameworks swiftly — including remote deployment alternatives, evacuation readiness, insurance reassessments, and structured mental well-being support," Sonica Aron, Founder and Managing Partner of Marching Sheep, a HR firm said.

Meanwhile, IT companies have issued advisories restricting non-essential travel to West Asia. TCS and Wipro have advised their employees to follow guidance issued by local authorities. TCS has suspended all incoming and outgoing travel to and from West Asia, including transit, as airspace across several countries remains closed.

"The macroeconomic concern is that oil prices might shoot up again, or that the region's economic growth may slow, which could impact global technology spending and affect India's IT sector growth in the next fiscal year. Recently, impacts on data centres in the Gulf have also caused an outage in the cloud, posing an operational risk for companies that manage large chunks of data for their clients in the region," Kanishk Agrawal, CTO at Judge Group, India, said.

India's IT sector has realised that it will have to diversify its operations and accelerate the transition to remote-first delivery to safeguard business and that of its clients. The sector that earns over 70% of annual revenues from the US and the UK has so far coped with the situation by invoking contingency plans that have enabled them to work remotely, Agrawal added.

Will there be any slowdown in overseas hiring? Aditya Narayan Mishra, MD and CEO of CIEL HR, said if overseas hiring slows down, construction, infrastructure, hospitality and allied services would be the most-exposed sectors, as they employ a significant share of Indian blue-collar workers in the region. States such as Kerala, Tamil Nadu, Telangana, Andhra Pradesh and parts of North India could feel the impact through.

"Large-scale visa non-renewals, layoffs in Gulf construction projects and sustained decline in remittances are some of the signals to look out for. These indicators would offer early warning if the situation shifts from uncertainty to structural disruption," he said.

Nasscom monitors the situation

IT industry body Nasscom is closely monitoring the evolving situation in West Asia. "Operations across the industry are continuing as usual at this stage, while member companies remain vigilant and prepared to take additional measures as required. Employee safety and security remain the industry’s foremost priority," Nasscom said.

As a precautionary measure, Nasscom has advised member companies to defer travel to affected areas. Companies have also been advised to enable work-from-home arrangements for employees currently in the region.

"We are in constant touch with the Nasscom Middle East Council and advise all employees in the region to remain in regular contact with their respective local embassies and take all necessary precautions as communicated by relevant authorities and employers," the industry body said.