Will World Economic Slow-Down Help or Hinder Indian IT Industry?

What will be the impact of the global financial turmoil on the Indian IT industry? This is the billion dollar question often asked. There are those who think that the Indian IT industry will suffer because much of its revenue has traditionally come from clients from the financial sector, especially those based in the US. Then there are those who believe the industry will actually benefit from a slowdown. Clients will face severe cost pressures and will ship out even more jobs than earlier.

There are indications that the first scenario is playing out. As per reports in several leading business dailies, many IT companies are now increasing working hours, freezing salaries, easing exit policies and even laying off existing employees. Targets for fresh recruitment have been cut. As per the New York Times, the reason Indian IT companies might be vulnerable as compared to their global counterparts is because they handle the front and back office functions. They have not graduated to the point where they could help develop new products, sharpen marketing techniques and evolve corporate strategies for their clients.

Comments

[Kunst:]

How much longer can the big tech companies convince Congress that they need more H1B visas because there is a shortage of qualified Americans for the jobs?

2008 Dec 08 12:07 AM

[Maya_:]

Another invaluable insight from equitymaster. Their research quality is perhaps the poorest I have ever seen. Look at this article - they state a concern but are too scared to offer their own perspective.

Does anyone know of a good source of research information in India. That is other than equitymaster which I find lacks insight into a company, industry or sector and of course their calls are mediocre at best. I like the macro insight put out by Uday Kotak, but again when you see the quality of their staff its laughable.

2008 Dec 17 07:22 AM