Recent geopolitical events are reshaping global trade and technology dynamics, with significant implications for India’s cybersecurity sector, heavily reliant on US tools and solutions. From Trump’s tariffs to warming Indo-China ties, these developments are poised to influence the industry, challenging the notion that cybersecurity operates in a silo.
Donald Trump’s re-election and his aggressive tariff policies, including a 25% tariff on Indian goods due to purchases of Russian oil, have sparked concerns. These tariffs, aimed at reducing US trade deficits, could increase costs for Indian IT firms dependent on US cybersecurity tools like those from Microsoft, CrowdStrike, and Palo Alto Networks. The Indian IT sector, contributing 7.4% to GDP in 2023, faces potential margin squeezes as US software licenses become pricier, compelling firms to explore cost-effective alternatives.
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The stock market’s volatility, with the Sensex dropping 2.7% in early August 2025 amid global trade uncertainties, reflects investor unease. This volatility could reduce cybersecurity budgets for Indian enterprises, particularly MSMEs, which rely on US solutions for data protection. A 2024 Nasscom report highlighted that 80% of Indian firms use US-based cybersecurity software, underscoring this dependency.
India’s stoic response to Trump’s policies, coupled with a reassessment of BRICS strategies, signals a push for self-reliance. The inclusion of nations like the UAE in BRICS Plus strengthens India’s access to critical resources but also prompts a reevaluation of tech partnerships. The government’s “Make in India” initiative could accelerate domestic cybersecurity solutions, reducing reliance on US tools. For instance, startups like Sequretek and Algoritha are gaining traction with indigenous offerings.
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Microsoft’s decision to shut out Nayara Energy from its services, citing compliance with US sanctions, highlights vulnerabilities in India’s dependence on American tech. This incident could push Indian firms toward diversifying vendors or investing in local platforms, as seen in the rise of BharatOS for mobile ecosystems.
Meanwhile, a potential thaw in Indo-China relations, evidenced by recent diplomatic talks, may open avenues for collaboration in tech, including cybersecurity. However, this could raise concerns about data security, given China’s history of cyber intrusions, as noted in a 2024 CERT-In report on rising cyberattacks.
Brazil’s emergence as a new market offers opportunities for Indian IT firms to expand, potentially offsetting tariff impacts. Yet, the cybersecurity sector must navigate increased geopolitical risks, such as supply chain disruptions, to maintain resilience.
Far from being a silo, India’s cybersecurity business is deeply intertwined with global shifts. To thrive, it must balance US tool dependency with strategic diversification and indigenous innovation.