NEW DELHI: Following reports of US slowdown, the Confederation of Indian
Industry (CII) carried out a survey among its members in the IT sector. While
there were some concerns over the impact of slowdown on the Indian software and
services sector, the overwhelming response was that the slowdown in US had
provided a great opportunity to Indian software and services companies.
Indian software and services sector comprises mainly of 'body shopping',
maintenance projects and new/R&D projects. It is believed that the bigger
Indian companies primarily engaged in maintenance work will not be affected in a
major way, as maintenance of existing software and services would continue to be
necessary. The volume of new and R&D projects will come down in the
short-term, but only a few Indian companies service this segment of the market
in the US.
'Body shopping' is likely to suffer with concurrent impact in the short-term.
However, respondents felt that in the medium and long term the slowdown offered
a great opportunity to Indian companies for moving projects to India - from
onsite to offshore. US corporates looking to
cut cost will find outsourcing their work to India attractive. This would
ensure that exports from India may continue to grow.
The respondents felt that in order to facilitate the promotion of India as
the preferred offshore site, the government may need to have a closer look at
the areas of hindrance such as high communication costs and inadequate
infrastructure, especially in the telecom sector.