BENGALURU: Even as the Indian IT sector looked forward to improved trade clarity by August, potentially boosting US consumer spending, the announcement of 25% tariffs threatens to dampen sentiment and curb discretionary spending, which was only beginning to show signs of recovery.The firms’ lacklustre performance was attributed to weak macroeconomic conditions, cautious client sentiment, and delayed decision-making. Nitin Bhatt, technology sector leader in EY India, said, “While the Indian IT services sector isn’t directly hit by the newly announced 25% US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced.