US slump may be good for India: Premji

Ltd., said on Tuesday that Indian firms would gain from the ongoing US economic

slowdown.

The downturn would force US firms to reduce costs and look at outsourcing

more software services, Azim Premji, chairman of Wipro Corp, said at a business

conference in Calcutta. And with software service costs in India much lower than

in the United States, the slowdown "should be good for Indian business in

the long-term," he said.

"India today offers the best value equation in software services. The

costs here are 40 to 50 per cent of US costs," Premji said. "Thus, if

20 per cent of the top 1,000 US firms are now outsourcing from India, I see that

number going up significantly in the days ahead," he said.

The statement is of considerable significance in the wake of Indian software

stocks taking a beating in recent weeks over fears that software companies may

be hit by the US economic slowdown.

(C) Reuters Limited 2001.