US credit woes – Increased opportunity for Indian IT and BPO sector?

August 9, 2011 – Standard and Poor created unexpected tidal waves in the global market by downgrading United States in its financial stability earlier this week.

The impact was high as it resulted in market crash all around the globe. Expert gave different opinion on the upcoming risk. Recession is too expected in the United States.

The Indian Information Technology (IT) and Business Process Outsourcing (BPO) Sector companies are however finding opportunities to enhance their business in this high risky market. The impact of the news has positive sides on the Indian Information Technology and BPO sector which holds about 70 % of it earnings from the US.  

NASSCOM authorities stated yesterday that the India Export will be badly affected by the downgrading but IT and BPO sector will be the least affected. According to NASSCOM Indian IT sector is secure at this point of time. The downgrading has a positive impact and there could be bigger opportunities for India. The IT and BPO sector is expecting more business from the US clients because of the availability of cheap Labour in India. This would increase the inflow.

IT giants like Wipro feel that the downgrading will offer immense opportunity for the India BPO firms. The global players in the Information Technology IT find the latest trend very competitive. The trend will make the US clients to rethink continuing business with risk oriented market and put more focus on offshore markets. The clients will find it more feasible to switch business to offshore market like India where they can find cheaper labor.  

IT industry can also find greater business opportunities by enhancing partnership with US customers. Another benefit to the Indian IT and BPO sector is the well equipped domestic market which ensures consistent growth in the sector.  Clients looking for customer support and service in the banking sector and insurance sector are still sticking on business with the Indian BPO companies. The sources say that there will not be any impact of US downgrading on the outsourcing business. Outsourcing to India is ultimate benefit for any company as there is a calculated savings up to 75% in cost.

More over the Information and Technology (IT) sector has the history of withstanding the economic crises in 2008. Many Indian companies have grown to become the top companies globally after the crisis.

It may be crucial time for the IT sector in United States, but Indian IT and BPO sector find the trend healthy. Inflow of capital and business is expected. Indian firms find business opportunities in the US credit woes because of the cheap labor and increase in the global competition in the information technology sector; supported by well growing domestic market.

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