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Economic crisis? Indian IT can survive it
March 17, 2009 16:13 IST
India's IT industry is well-placed to weather the global economic crisis despite decline in exports of such services including computer software for the first time over the years looks inevitable this fiscal.
Indian IT companies, which participated in the CeBIT 2009 in Hannover, expressed confidence that innovative skills of the software engineers and IT professionals along with their ability to adapt to the rapidly changing situation in the markets around the world will help cushion the impact of the global economic meltdown on the industry in India.
Most of the Indian exhibitors in the CeBIT, the world's largest IT and computer fair, were upbeat about continuing their existing business and forging new partnerships by offering their clients new solutions and services.
"The impact of the economic crisis on India's IT industry so far has been minimal and the industry has the resilience to withstand the crisis for some more time," additional executive director of Electronics and Computer Software Export Promotion Council D P Gupta, who coordinated India's participation in the CeBIT, told PTI.
Gupta said if the economic downturn in major markets like the United States, Europe and Japan continued for a longer period, then it could have far-reaching affects on the industry.
At present, many small and medium-level IT companies have been hit hard by the crisis because they are not in a position to diversify their products or to find new markets, he said.
"However, one silver lining for the industry is that Indian IT and computer software companies are designing and developing high-end solutions and services and therefore clients around the world will continue to require their products to remain competitive," Gupta said.
The ESC has already scaled down its growth target for computer software and IT enabled services exports for the current financial year from 25 per cent to 15 per cent.
But Indian IT companies feel they are already laying the groundwork for the industry to bounce back to its growth course when the global economic situation stabilises.
"The present crisis is both a challenge and an opportunity for Indian companies to consolidate their existing business and to find new partners," Executive Director and CEO of Pune-based e-Zest solutions Devendra Deshmukh said.
"Our message to our clients and potential partners at the CeBIT is that they can continue to count on the technical competence and expertise of Indian IT professionals in developing various packages and solutions to cope with the crisis," Deshmukh said.
"We are trying to preserve and nurture our customer relationships by offering them cheap solutions and services and by remaining loyal to them," Deshmukh added.
In spite of the crisis, world-wide demand for computer software and IT enabled services in areas such as health care, manufacturing, publishing, education, etc will continue to grow and Indian companies can benefit from that, he said.
Bankruptcy management and legal process outsourcing have gained new significance as areas holding great potential for business in the wake of the economic and financial crisis.
Jayanthra Jayachandran, CEO of Coimbatore-based Angler Technologies, said that the customer loyalty and better services are the right strategy to fight the recession.
He said his company was less affected by the crisis than many other Indian IT companies because of its diversified customer base and products, but it had to postpone some of its expansion plans.
India's IT services and computer software continued to generate strong interest among the trade visitors at the CeBIT and Indian exhibitors received many business inquiries and established new business contacts, Gupta said.
The overall response received by Indian companies was not as great as in previous years, but considering the present doom and gloom in major markets in North America, Europe and in Asia, it was more than anticipated, he said.
About 25 Indian companies, mainly small and medium-level enterprises, presented the latest India has to offer in the areas of computer software, IT enabled services, electronics hardware and telecommunication equipments.
India's exports of computer software and IT enabled services reached a record level of $31.17 billion during 2007-2008 when they went up by 28 per cent over the level of $24.27 billion in 2006-2007, according to the ESC.