The Hindu Business Line : ‘India growth story intact’

Upbeat on long-term: (From left) Mr Raman Roy, Chairman and MD, Quattro; Mr S. Gopalakrishnan, CEO and MD, Infosys Technologies; and Mr Som Mittal, President, Nasscom, at the TiE Entrepreneurial Summit 2008 in Bangalore on Wednesday. –

Our Bureau

Bangalore, Dec. 17 Notwithstanding the impact of the global economic turmoil, the Indian IT industry is optimistic about the long-term growth prospects and expects to ride out of the downturn like in the past.

Participating in a panel discussion on “Outsourcing, Offshoring, Obama and Over-reaction,” at the TiE Entrepreneurial Summit 2008, industry players maintained that the India story was intact, while growth would slow down in the short-term, reflecting the economic environment.

“Slowdown was anticipated… the impact would be felt in 2009 and recovery is expected in late 2009 and early 2010,” said Mr S. Gopalakrishnan, CEO, Infosys. Striking an optimistic note, Mr Gopalakrishnan said India was still seeing a six to seven per cent growth while the world is in recession.

The industry has benefited from the downturns in the past and is well positioned to take advantage as offshore provides a way to cut costs for customers.

Growth estimates

Indian IT vendors are facing uncertain times as customers have delayed or held back their investments deploying new technology applications in the US and Europe, which account for 90 per cent of the country’s software exports.

Nasscom, which had earlier forecast a 21-24 per cent growth for the Indian IT exports, expects to lower growth estimates for the sector in the next few weeks. India’s $40-billion IT services exports currently account for a mere five per cent of the global IT services spend of $800 billion.

“The industry had to now contend with Osama,” said Mr Som Mittal, President, Nasscom, referring to the recent Mumbai terror attacks, which had forced customers to postpone their travel plans to India.

Mr Raman Roy, Chairman and managing director of Quatrro, a BPO firm, said the small and medium-sized companies in the US, who are yet to take advantage of offshoring and outsourcing, present a huge opportunity for the Indian IT SMEs.

‘Part of the solution’

Outsourcing is unlikely to be affected, Mr Roy said, referring to the apprehensions over the US President-elect Barrack Obama’s anti-outsourcing stance in the run-up to the polls. “Once the dust settles down, India will be part of the solution to the crisis, rather being part of the problem,” Mr Roy said, stressing that the industry should get its act together to take advantage of the opportunities.

Mr Sanjay Kalra, President, Tech Mahindra, said the industry, which had focused on operational efficiency and the cost factor, should invest on building capabilities to grow to the next level.

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