Software firms worry US weakness will hit India business
A slowdown in the US economy will likely hit the global information technology industry, including India's outsourcing cos, experts said. Cyber threats in 2008!
By Agencies |
MUMBAI: A slowdown in the United States economy will likely hit the global information technology industry, including India's outsourcing companies that have led the country's economic growth, industry experts said on Wednesday.
As the economy slowed, companies were likely to spend less on information technology and projects could be postponed, Simon Ormston, the head of outsourcing marketing at BT Global Services, said at an industry conference in Mumbai.
"The global economy will be impacted," said Ormston. "The US is by far India's biggest market."
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The British telecom company works with several big Indian partners including Tech Mahindra, Infosys, Tata Consultancy Services and Wipro. It was granted licenses last year to provide national and international long distance services by the Indian government.
The US is the Indian software industry's largest market with a share of 61 percent, the United Kingdom accounts for 18 percent of India's software services and continental Europe for 12 percent.
However, Ormston said the downturn could also provide opportunities for India, where a large pool of skilled but cheap workers has made it the leader in the field.
"Large companies could find a competitive advantage and cut productivity costs by outsourcing to India, which still has a massive price advantage," he said.
Indian companies said a further challenge was the weak dollar, which was hurting their revenue. The dollar has fallen more than 10 percent against the rupee in the last year.
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"Companies will have to start thinking of revising prices," said Sanjiv Puri, managing director of ITC Infotech.Download
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