April 12, 2007 03:42 IST
The US slowdown stands to benefit the estimated $8 billion Indian business process outsourcing (BPO) industry, at least in the short term.
US companies, hoping to save money during the recessionary phase, are likely to increase outsourcing of information technology services.
However, "outsourcing American jobs to India" can again be an issue during the 2008 US presidential elections. With growing pressure on IT budgets, large outsourcing deals should see a revival in 2007, believes Neeraj Bhargava, CEO, WNS. "The US witnessed a slowdown of up to 5 per cent in 2005-06 because of slowing numbers in outsourcing deals, but this time around we should see a renewed push from the US to seek more business offshore."
During a slowdown, projects on the periphery get cancelled and Indian outsourcing industry, has over the years proved itself, invested in resources and skills and moved into the core business areas, adds P K Sridharan, executive director and chief mentor, Hexaware. "What really drives US firms is their bottom line and they will only increase outsourcing to cut on cost as employee cost accounts for around 40 per cent of their operating costs."
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Industry experts, who wish not to be named, say that it's the run-up to the elections that generates more rhetoric rather than the election outcome.http://inhome.rediff.com/money/2007/apr/12bpo.htm
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