Top Indian IT firms are facing significant challenges as a result of the developing banking crisis in the West, which accounts for up to 40% of their sales from the Banking, Financial Services, and Insurance (BFSI) sector. In the short term, new deals for IT firms may be impacted by the failure of Silicon Valley Bank, Credit Suisse, Silvergate, and First Republic Bank, according to multiple sources.

Rajeev Chandrasekhar, the Indian Union Minister of State for IT, actually shares the same concerns. Although he acknowledges that BFSI revenues may suffer, he remains upbeat about the future of the sector.

According to a research issued by JP Morgan on Friday, TCS, Infosys, and LTI Mindtree were the companies most exposed to the crisis. According to the research, their exposure to the recently bankrupt Silicon Valley Bank may be between 10 and 20 basis points.

Market analysts also foresee the negative impact of the banking crisis on the Indian IT sector. Vijay Chopra, MD and CEO of Enoch Intermediaries, said, “Right now the Indian IT sector is vulnerable. BFSI contributes to a large extent to IT companies' revenues. The outlook right now is very conservative, I would not recommend buying IT right now as they are already facing headwinds.”

Despite near-term concerns, economists and industry professionals are optimistic that central banks throughout the world will step in to help resolve the situation.