By IANS,
New Delhi : Though the US is the largest market for India’s software and outsourcing exports, the domestic industry feels the ratings downgrade of the world’s largest economy will have little impact on its fortunes, even as markets remained nervous.
“The economic crisis in the US, unfolding over the last few days, does not have any major bearing on the country’s private sector. Although the global economic environment is a cause for concern, it is not likely to impact the Indian IT industry, in the near-term future,” said the National Association of Software and Services Companies (Nasscom).
India’s software and outsourcing generated total revenue of $76 billion in 2010-11, out of which exports accounted for $59 billion. The US was the single largest export destination, having accounted for 61.5 percent of the exports or about $36 billion.
“The industry is closely intertwined with the global economy and has a burgeoning domestic market which is equipped to sustain growth. The US is and will continue to be one of the largest markets for us, and in case of an economic slump, we see the Indian IT industry strengthening its partnership with the US customers,” said the IT lobby.
The developments, however, saw the sector-specific index for information technology scrips at the Bombay Stock Exchange (BSE) fall over 236 points, or 4.33 percent, as investors feared adverse impact of global developments.
In fact, the drop in the IT index of the exchange was the steepest after that for realty industry at 4.46 percent.
All major software firms listed on the BSE closed in the red with leading firms like Infosys losing 4.73 percent, Tata Consultancy Services shedding 4.49 percent and Wipro falling over 2.5 percent.
“With talks of a double-dip recession in the world’s largest economy, Indian exports are also likely to be impacted,” said the Associated Chambers of Commerce and Industry of India (Assocham), a leading industry chamber.
“The information technology industry, too, will feel the heat as uncertainty and negative sentiments blow across global businesses,” said Assocham secretary general D.S. Rawat.
India is the 14th largest creditor to the US with an overall exposure estimated at $41 billion.