On an unrelated note, a year ago if you bought a home your realtor probably told you that this is the best time to by home. [You get my drift.]
Seriously, I am not saying that a US recession will not benefit outsourcing companies in India. They may or may not. If a possible US recession is short and shallow, India might not be adversely affected that much. If the recession is deep and prolonged, it will hurt India more than it will hurt US. But I don't think a recession of any scale here will help India.
Excerpts from the article:
PC World
Monday, February 18, 2008; 12:13 AM
Close on the heels of the appreciation of the Indian rupee against the dollar, Indian outsourcing companies are grappling with a new problem -- uncertainty among U.S. companies about a recession has made these companies delay finalizing their IT budgets.
As a result many large deals between U.S. clients and Indian outsourcers will not be finalized in the first half of this year, said Sudin Apte, senior analyst and country head for India at Forrester Research.
Business will, however, pick up for Indian outsourcers by the fourth quarter, particularly if the U.S. economy is in mild recession, Apte said.
"Our experience is that if the IT budgets of U.S. customers are marginally impacted in a recession, then there is an increase in business offshore, to cut costs," Apte said. If the cuts are too large, whole projects can however get canned, he warned.
The U.S. is the largest market for Indian outsourcers.
"We believe that the recessionary nature of today's economic climate will promote the adoption of increased outsourcing," said Siddharth Pai, a partner at outsourcing consultancy firm, Technology Partners International Inc (TPI) in Houston, Texas.
TPI does not as yet see a cut in either discretionary or non-discretionary spending on IT by companies.
Forrester said Monday that the IT services and outsourcing market will increase by 4 percent this year to US$162 billion from a growth rate of 6 percent a year earlier. The research firm forecast slowing growth this year for purchases of IT products and services in the U.S.
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