Indian technology companies are seeking local talent, clients and AI capabilities as Europe tightens rules on data, cloud services and digital sovereignty
Indian IT services companies are increasingly turning to acquisitions and strategic partnerships to strengthen their presence in Europe, where demand for artificial intelligence and digital services is growing alongside tighter regulatory requirements.
Recent moves by major firms include Tata Consultancy Services’ agreement to acquire management and IT consultancy MHP, Persistent Systems’ bid for Nagarro and LTIMindtree’s proposal involving Randstad. The deals reflect a broader strategy of gaining established clients, specialised talent and technology capabilities rather than building European operations entirely from scratch.
Gartner analyst DD Mishra said Indian IT companies had increasingly used acquisitions and partnerships to enter and expand in European markets between 2019 and 2026. The focus has increasingly been on consulting, client relationships, talent, AI and intellectual property.
The shift comes as European businesses step up investment in generative and agentic AI while facing stricter requirements on data residency, AI governance and digital sovereignty. More than half of Western European enterprises have deployed generative AI, according to Mishra.
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Regulations such as the EU Data Act and the General Data Protection Regulation are also increasing the importance of local data hosting and stronger accountability over digital operations
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Indian technology companies are therefore working with European cloud and digital-service providers to address these requirements
TCS launched its SovereignSecure Cloud in Europe in May, combining public cloud infrastructure and AI capabilities with services designed around European data and operational requirements.
The expansion is also taking place as IT spending growth in North America becomes more cautious, encouraging Indian providers to diversify geographically. Closer India-Europe economic ties, including the India-EU agreement and India-UK free trade arrangement, could further reduce some barriers to business and professional mobility.
Consolidation is also visible among mid-sized Indian technology companies. Happiest Minds Technologies is merging with ITC Infotech, creating a proposed business with about 90,000 employees and annual revenue of roughly Rs 7,000 crore.
