Indian IT industry insulated from economic downturn: Nasscom

October 20th, 2008 - 6:18 pm ICT by IANS  

New Delhi, Oct 20 (IANS) India’s IT industry is insulated from the financial crisis that has hit many economies globally, and companies here have not stopped hiring professionals either, according to a leading IT industry body. “The growth has certainly slowed down as an immediate impact of recession; however, the companies are hiring from campuses for the next quarter,” Som Mittal, president of the National Association of Software and Services Companies (Nasscom), told reporters here Monday.

Despite the economic meltdown, companies worldwide have to maintain their back-end operations and the crisis will not affect any existing contracts, he said.

Mittal, however, added: “The current situation may have an effect on new contracts.”

The Nasscom, along with global accounting firm PriceWaterHouseCoopers, prepared a report, ‘Opportunities for Indian IT Industry: Japan’, highlighting Japan as an emerging market for Indian companies to invest.

The report, released here Monday, was part of the Nasscom’s series of reports on the emerging markets for Indian IT sector.

Although India’s annual IT exports to Japan currently stands at less than $2 billion, the ageing population in the island nation and need for skilled manpower provide a huge avenue of growth for Indian companies, Mittal said.

“The total Japanese IT services market currently stands at $108.6 billion, out of which offshoring is limited to only 8-10 percent at present. Acute manpower shortage in the Japanese economy gives India the pocket for growth,” he said.

He, however, maintained that Japan would not provide an immediate solution to the current economic crisis in the west and its likely repercussions on the Indian IT service industry.

“Japan is ideal as a long term investment destination where the benefits will be reaped for the time to come,” he said.

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