beyondbrics

The Greek crisis gave India’s energetic global IT software groups a bit of a scare when Infosys, the second biggest Indian software company, produced disappointing first quarter figures earlier this month and blamed Greece, the euro’s recent drop, and a general rise in labour costs.

TCS, the market leader, and Wipro, the number three, later comfortably beat forecasts. However, as an FT analysis has established, stagnation in Europe is encouraging the industry to look elsewhere, not least at emerging markets.

While rising costs are a challenge, companies are announcing plans to expand their businesses in Latin America and the Middle East. TCS and Wipro are to hire more than 35,000 people each. Infosys is taking 36,000 – 6,000 more than it planned three months ago.

N. Chandrasekaran, chief executive of Tata Consultancy Services

N. Chandrasekhar, the chief executive of TCS, told the Financial Times in a video interview in his Mumbai office that he expected revenues from Latin America to be worth $1bn in the next three to five year, up from the current $300m.

Similar tunes came from Azmi Premji, the chief executive of Wipro, the third largest IT group, who said he expected expanding business in the Middle East to boost the companies total revenues in the following quarters.

Furthermore, with global IT spending expected to grow 9.3 per cent this year from an estimated $1,400bn in 2009, according to Forrester Research, there is little to be concerned about, especially when many foreign rivals are still figuring out how to exit the 2008 crisis.

The lesson here is simple: Hard times are here to stay, but the resilience of the IT sector sees no limits.

India’s IT outsourcing industry was born out of nothing in the early 1980s. Free from the shackles of government intervention it went on to become the backbone of India’s economic ascent and the best global envoy of the ‘New India’: self-confident, ambitious and independent.

To this day the stellar growth of the IT industry, which a bunch of tech savvy guys set up in Bangalore to service the back offices of western multinationals, continues to be the sexiest business story in modern India. One that many have tried to replicate but with little success.