This push towards Japan, the Middle East, Australia, Asia Pacific (APAC) as well as the home market India by industry leaders including Tata Consultancy Services, Infosys and Wipro could be due to them having “reached a ceiling in the (US) markets and therefore, needing to diversify,” technology experts said.

Currently, US enterprise clients account for roughly half of India’s $254 billion software service exports according to industry estimates.

“Earlier, for many firms (the share of US business) could have even been more than 60%, now it has come down. Moreover, given markets such as APAC and Middle East are going through rapid transformation, they have become focus area for most providers,” said Yugal Joshi, partner at US-based research firm Everest Group.

In the past year, both TCS and Infosys have seen the share of business from North American clients reduce by around 2%, due largely to a freeze in technology spending and macro-economic uncertainty in the post-Covid years. At the same time, the share of business from other markets has posted a modest but steady increase.

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In the July to September quarter of fiscal 2025, TCS posted a whopping 95.2 % growth in India boosted by its mega-deal win from state-owned telco BSNL. The contribution from the India market to TCS revenue grew to 8.9%, the highest since 2018. Its business in the Middle East and Africa grew at 7.9%, Asia Pacific grew 7.5%.

Meanwhile, TCS’s business in its key market North America declined 2.1%, while Europe grew a meagre 1.8%.

It was no different for rival Infosys, which saw higher growth in India at 16% as compared to 4% in ‘Rest of the World’region even as business in North America dipped 2.7%.

Experts are of the view that given global macroeconomic uncertainty and growing price competitiveness, India’s large IT majors want to diversify risks.

“US and Europe markets are mature for IT Services and the next phase of growth is likely to come from other regions. There is digitisation and localisation going on in many regions attracting investments and creating IT opportunities,” said Pareekh Jain, founder and CEO of IT research firm EIIR Trend.

To be sure, the US market will continue to be the growth driver in the near term.

However, IT companies are diversifying their focus with an eye to a long-term overhaul. Particularly, as technology transformation becomes core to other regions amid the disruption triggered by generative artificial intelligence (GenAI).

Speaking of TCS’ long-term strategy during the post-earnings call in October, MD and CEO K Krithivasan, said, “we are investing significantly to create a large footprint in emerging growth markets. Top bets include India, APAC, Latin America and Middle East and Africa. We believe these markets are likely to turn into a sustainable driver of long-term growth. A scalable presence in these markets is likely to provide the muscle for growth in TCS overall business over the next couple of decades.”

Noting that the profit margin in growth markets may not be as high as the major markets, the TCS CEO said it can change once the volume of business picks up and companies manage costs.

Separately, Infosys said that of the 21 large deals that it won during Q2FY25 three were signed in India and one in ‘Rest of the World’ region while America accounted for 12 and Europe five.

Azim Premji-promoted Wipro saw slightly broader growth and a pickup in the Asia Pacific, Middle East and Africa (APMEA) and Europe region. CEO Srinivas Pallia said Wipro is seeing a good deal pipeline in APMEA and Europe, besides the momentum also for Americas 1 and Americas 2.

Larger peer HCLTech has not seen a major impact on its US and European business as of now.

As per a November report by Nuvama (formerly Edelweiss) Institutional Equities report, America’s ACV or annual contract value was down 7%. “EMEA had the best quarter ever in terms of ACV and was up 2%. Announced three mega deals. Asia Pacific ACV was up 17% YoY, smaller deals drove the growth,” it said.