The new lending laws being worked out in the US after the subprime lending crisis could bring more business to Indian BPOs. According to a latest report by Cisco senior vice-president (IT services-India & SAARC) Ajay Goel, the new regulations for loans in the US may lead to more transaction work to India.

He reckons that these new laws will be fairly stringent. It may prompt US banks to increase their outsourcing work to Indian BPOs to lower costs. This will be a huge opportunity for Indian BPOs and IT companies which already have some of America's top banks as clients.

The report also suggests that the IT spends in the Indian market are rising, offering strong opportunities for various service providers. The US subprime mortgage crisis has not visibly impacted India yet. Indian IT firms are unlikely to be hit by the US sub-prime lending crisis as their exposure to clients in the mortgage sector is limited Company like TCS which has about 40 per cent exposure in the BFSI segment has been able to maintain its growth momentum.

"If the US economy slows down, it will provide major opportunities for Indian IT companies not only in the BFSI segment, but also other segments as clients will be under pressure to cut cost. Quoting industry estimates, Goel's report says IT spending in India is set to grow the fastest in the world in 2008. "As the information & communications technology market in Asia-Pacific reaches $154 billion in 2008, India and China will contribute half of the total spend. Over the next three years, the Indian market will nearly triple in size, becoming a $71 bn market by 2012."

A growing domestic market and the rising rupee have triggered IT companies to increase their focus on the Indian market. Infosys, for instance, has decided to focus on India especially in the banking and telecom segment. Indian companies are also growing in size especially in the manufacturing and telecom segments. To compete with global players they need to invest in IT.

Businesses in the IT/ITeS sector that have been hit need to look for ways to hedge against future appreciation. They also have to look at harnessing technology to increase productivity and efficiency. These companies need to work towards a more a cost effective infrastructure and also use a strong network to tap talent in tier II and III cities. Source: Economics Times