New Delhi: Indian information technology (IT) companies could take advantage of Standard and Poor’s (S&P) downgrade of the US credit rating to strengthen partnerships with customers in the US, industry lobby National Association of Software and Services Companies, or Nasscom, has said.
On Saturday, S&P lowered the US sovereign rating by a notch to AA+, the country’s first downgrade since 1941, raising fears of another economic slump.
“The US 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 to build in greater business efficiencies,” Nasscom said in a statement on Monday on the likely impact of the downgrade on India’s IT sector, which derives about two-thirds of its revenue from the US.
Nasscom said it will continue to monitor developments in the US and advised Indian IT companies to be cautious.
Wipro Ltd’s chief executive (IT business) and executive director T.K. Kurien echoed Nasscom’s opinion. “In fact, the structural weakness in the economy offers opportunities to IT services companies as we help global corporations variabalize their IT, thus making them fundamentally more adept to compete,” he said.
He added that India’s IT industry is better prepared to handle an economic slowdown than it was in 2008.
On Monday, the Bombay Stock Exchange’s (BSE) technology index fell 4.33% to 5,222.41 points as the benchmark Sensex index dropped to its lowest level in a year before regaining to close at 16,990.18 points, down 1.8%.
India’s top IT company Tata Consultancy Services Ltd lost 4.49% to end trading at Rs1,009.25 on BSE, and its closest rival Infosys Ltd closed down 4.73% at Rs2,468.00.