US Slowdown and its impact on the Indian IT industry

Recently there has been talks of a slowdown in the US economy. Business Gurus opine that it will affect the Indian IT industry because the majority of the Indian IT revenues come from the US. I would beg to differ. I feel that all this is noise created by the media. And the stock markets react to it adversely.

In an event of US Slowdown, some economists argue that companies would get into the cost cutting mode and reduce their IT budgets and hence outsourcing revenues will reduce. But there is another way of looking at this. A lot of companies would feel that developing in-house IT capabilities would be a high cost proposition and hence outsource more. These companies will temporarily stop its in-house IT plans and outsource more to low cost destinations like India. Hence I would argue that US Slowdown would relatively benefit India.

The bottomline is that it is for the time to tell what would happen in the future!