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Bangalore/Mumbai, June 4 Reeling under the impact of the economic downturn, the Indian IT industry now faces a new short-term concern as client visits could get postponed with the US issuing travel advisory to its citizens, citing high threat from terrorism in India.

“There will be some impact as some clients could postpone their visits. However, the impact may not be material,” said Mr V. Balakrishnan, Chief Financial Officer, Infosys Technologies Ltd. “The client visits are already down because the spending power of clients has been impacted due to the economic environment. If they are not going to travel, we will travel,” Mr Balakrishnan said.

Such an advisory that affects client visits could also lead to delayed decision making. The US accounts for about 60 per cent of Indian IT revenues.

“We have started seeing first signs of client visits in recent weeks. Such an advisory could have a short-term impact as clients prefer to wait and watch the situation,” said Mr K. K. Natarajan, CEO, MindTree Ltd.

Typically, client visits pick up after the budgets get finalised in January-February as the focus shifts to execution.

“These travel advisories do have an impact on client visits; large corporations pick up such advisories because they have insurance obligations,” said Mr P. D. Mundhra, Executive Director of Mumbai-based KPO eClerx.

“If client visits are postponed it does slow down decision making for outsourcing engagements. However, from our experience we can say that customers do make the trip once the advisory is lifted and hence we perceive it as a temporary phenomenon,” he said.

Mr Mundhra feels that customers still regard India as a safe destination for doing business.

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