Indian IT will be hit due to Iraq war: Soota

By SiliconIndia   |   Monday, 31 March 2003, 08:00 Hrs
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PUNE: "A prolonged Iraq conflict will impact the order bookings of the software industry. This could lead to dozens of cancellations. If this war drifts, people may hesitate to travel. This is the time to finalize budgets and get these deployed. Any extension would hurt the Indian IT industry," said Ashok Soota, president, Confederation of Indian Industry (CII) in Pune.

According to Soota, the last six days have been pretty volatile leading to uncertain market conditions. "Oil prices could go upto $ 48 per barrel if this continues beyond 21 days and could leave a messy aftermath," he said.

Reasoning out concerns for the Indian IT industry, he said, "We are grossly underestimating the threat posed by China. The Chinese software market in Japan is double of ours. Japan accounts for four percent of India’s software exports. However, a major portion of the Japanese software market goes to China."

While agreeing that cultural issues could have made a difference here, Soota also mentioned that there were 70 flights operating between Japan and Shangai as opposed to the weekly flights from India and this has made it difficult for Indian companies to gain business. Moreover, Chinese companies are strong on both the technology and enterprise side while Indian companies have scored on the technology front.. Therefore, the Chinese end up leveraging a larger market, he pointed out.

Every recession had led to a spurt in outsourcing and India offered a good solution. All the large software companies want to make India part of their success story and therefore India is gaining market share.

Commenting on the recent problems faced by the Indian IT professionals abroad, Soota said that the problems which cropped in five different markets reflected that there were fewer jobs and that companies were not growing in terms of investment. "In the long run, the solution would be to bring the work back to India," Soota suggested.

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