Wall Street's pain may be India's long-term gain

MUMBAI/INDIA: The calls from worried Wachovia bank customers halfway around the globe started rolling in to Genpact's call center outside New Delhi late on Monday night: ``Are my deposits safe?'' ``Is my local branch going to close?''

New scripts for fielding such questions arrived at the Indian outsourcing company's Gurgaon office over the weekend as U.S. federal officials scrambled to salvage the troubled bank, said Anil Nayar, senior vice president for investor relations at Genpact, which handles customers calls for Wachovia.

``There's been a lot more inflow of people calling and asking about what's happening with the bank,'' he said Friday, days after Citigroup Inc. agreed to acquire Wachovia Corp.'s banking operations for US$2.16 billion in a deal backed by the FDIC, but before Wells Fargo & Co. swooped in Friday with a US$14.8 billion stock swap-style takeover that doesn't involve the US government.





The crisis on Wall Street is roiling India's outsourcing industry, which counts on the U.S. for 60 percent of its business and on global financial services and insurance companies for 40 percent.

In the near-term, sales growth will certainly take a hit, experts say, and it will be hard for Indian information technology, or IT, firms to wean themselves from their big-spending American customers and find software writing and back office contracts elsewhere.

Long-term, however, some argue that Indian outsourcing companies will benefit from a leaner global financial services industry and a more robust regulatory environment, as tighter margins encourage firms to move more work offshore and changing laws create a flurry of new compliance work.

Som Mittal, chairman of industry body Nasscom, said this week that sales growth will likely fall below 20 percent this year from the scorching 28 percent rate last year. Decision-making on new business has, he said, ``virtually stopped.''

But over time, he thinks India is well-positioned to benefit from restructuring.