As the economic crisis in Greece rocks the European Union, the IT industry is closely watching the situation, trying to understand its ramifications for Indian companies. The National Association of Software and Services Companies (Nasscom) sees no immediate threat from the crisis.

Long-term ramifications

It, however, feels that there could be long-term impact on the industry as the crisis will have a cascading impact on the EU. This geography is the second biggest contributor to IT revenues after the United States.

“We don’t see any immediate impact on the Indian IT industry. In the short-term, there won’t be any impact. Most of the Indian firms have either a very low exposure or no exposure to Greece. But in the long term there could be some challenges. In the eventuality of Greece pulling out of the European Union, there could be a cascading impact on the Indian IT industry,” BVR Mohan Reddy, Chairman of Nasscom, told BusinessLine .

The EU contributes around 25-30 per cent to the revenues of Indian IT companies, with the United States still the main contributor with 55-60 per cent revenues.

As is, growth in the region witnessed a slump in the last few months.

The acute financial crisis in Greece might lead to its exit from the bloc, pushing the currency into further volatility.

“Contributions from the region saw a slump in the last quarter. It actually fell by 3.8 per cent, while the Northern American market managed to show a growth rate of about 12 per cent,” an industry expert said.

Dependents in danger

Ganesh Natarajan, Vice-Chairman and Chief Executive officer of Zensar Technologies, said there won’t be any direct impact. . “But it could impact companies that depend more on the European Union,” he said.

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