'Bad news for US could be good news for India'

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Posted online: Monday , January 28, 2008 at 02:05:58
Updated: Monday , January 28, 2008 at 02:22:40

Mumbai, January 28: India should look at the possible recession in the US as an opportunity as domestic IT companies are more cost effective, Infosys Chief Mentor N R Narayana Murthy said on Monday.

"The fact that there may be a slowdown in the US means people will become much more concerned over better value for money...we could look at it as an opportunity," Murthy told reporters on the sidelines of a function in Mumbai.

The Indian IT industry fears that a possible slowdown in the US economy could lead their companies to cut IT spending.

As Indian IT companies are earning major revenue from the US, recession is being looked at as having a negative effect on the topline.

Murthy said that instead of an adverse effect, it was more likely that India benefits if the US economy, the world's biggest, witnesses a slowdown.

"The focus on better allocation of money means a greater opportunity for India," he said adding Indian IT companies were reasonably well placed to withstand the shocks if any.

Earlier, Murthy inaugurated public sector Bank of Baroda's financial supermarket, N M Chowkshi Business Centre, and its 1,575th core banking branch in Aizwal, Mizoram.

Bank of Baroda Chairman and Managing Director A K Khandelwal said the lender has 88 per cent of its business on the core banking platform.

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'Bad news for US could be good news for India' by Ramesh on 28 Jan 2008

What Mr Murthy said is correct. When the focus is on the economy, every cent spent matters. To cut the cost, more companies will be outsourcing thir IT operations. This is an oppurtunity for Indian companies, as they are placed well in US.

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Falacy ! by Dr.G.G.Rajan on 28 Jan 2008

In general, if any country faces recession,the first victim will be reduced production and resources utilization.This will lead to massive retrenchment of employees.In this move, all IT professionals including Indians will be the victims.But an intelligent planning could change the scenario.Indianbusinessmen may start trading from US or on behalf of US using all surplus commodities after a systematic analysis.This needs an expert IT professional.

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It is NOT correct by Savithri Shankar on 28 Jan 2008

I may not agree with this. With recession, U.S. would cut down every thing including Jobs and Spending. In all they would postpone (we call it slow) many of their activities (non-essential). On the otherhand with less money here, we would bargain MORE with India. In otherwords, Jobs could GO to China or any other cheap labor country (chealper than India). may be Murthy want to use this TAKE jobs away from India. Looks like it is a foundation for later talks---and moving...

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