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BENGALURU : While most Indian IT companies have moved out of Russia after its invasion of Ukraine, they are expanding in other Eastern European countries despite the uncertainties and a possible slowdown in business momentum.
Eastern European nations, such as Poland, Romania and Hungary, are attractive hubs for Indian IT companies to set up nearshore delivery centres due to the availability of quality talent in similar time zones. For instance, Poland is home to around 300,000 IT professionals with a good command over foreign languages. According to management consulting firm A.T. Kearney, Poland is a prominent outsourcing destination and has a favourable business environment.
“Today we have no centre in Ukraine but the other areas we have been expanding in and that has developed quite well… for our centres in other geographies in Eastern Europe we are seeing good growth…at our centres in Poland and Romania we are actively recruiting and scaling up," Salil Parekh, chief executive and managing director, Infosys, said during the Q4 analysts’ call. At the earnings call, Wipro chief executive Thierry Delaporte also said while it does not have any operation either in Russia or Ukraine, it continues to hire and expand in Romania and Poland as part of its normal business operations.
Tata Consultancy Services Ltd (TCS) said clients continue to spend on technology as long as they have the confidence that service providers are able to deliver. “Customers are asking us whether we could actually execute it (projects) from our Eastern European development centres," Rajesh Gopinathan, chief executive and managing director, TCS, said during the analyst call.
Analysts, however, warned that although the war may not have a direct impact on Indian IT firms it will result in shrinking IT budgets and slowdown in decision-making. “Rising inflation compounded with talent shortage has led to chief information officers rethinking their IT budgets that have slowed the decision-making process, especially in Europe where IT spending has paused. Higher inflation will lead to postponement of discretionary spends, and focus on cost optimisation will increase," ICICI Securities analysts said.
