Bengaluru, April 3 -- The U.S. has imposed a 26 percent tariff on Indian goods as part of major trade policy overhaul. While these tariffs don't directly impact the IT sector, they are seen as inflationary, potentially raising prices in the U.S. Notably, if inflation rises, U.S. companies may cut IT budgets, which could hurt Indian IT firms as most of them are reliant on U.S. clients.

Further, Goldman Sachs has raised its recession probability for the U.S. economy to 35 percent over the next 12 months, up from the previous estimate of 20 percent. Rising tariffs could hinder growth, drive inflation higher, and increase unemployment.

The firm has also raised its core inflation forecast to 3.5 percent at the end of the year, up from its p...