'U.S. slowdown not to affect Indian software industry'

By Our Special Correspondent

NEW DELHI, APRIL 6. The Indian software industry believes that the slowdown in the U.S. would not impact its growth and the impact, if at all, would be of a short term nature. This is the result of a survey carried out by the Confederation of Indian Industry (CII) among its IT sector members following reports of a slowdown in the U.S. ``While there were some concerns over the impact of slowdown in the U.S. had provided a great opportunity to Indian software and services companies,'' summarised the CII.

Indian software and services sector comprises mainly of body shopping maintenance projects and new or R & D projects. It is believed that the bigger Indian companies mainly engaged in maintenance work will not be affected in a major way, as maintenance of existing software and services would continue to be necessary. The volume of new and R & D projects will come down. However, only a few Indian companies are active in this segment of the market in the U.S.

Body-shopping is likely to suffer with concurrent impact in the short term. However, respondents felt that the medium and long term the slowdown offered a good opportunity to Indian companies of moving projects to India - from onsite to off-shore. U.S. corporates looking to cut costs should find outsourcing their work to India attractive. This would ensure that exports from India may continue to grow.

The IT companies felt that in order to make India an attractive destination, the Government should take a closer look at the high communication costs and inadequate infrastructure, especially in the telecom sector.

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