'Japan quake to have short-term impact on Indian IT exports' -Governance Now

'Japan quake to have short-term impact on Indian IT exports'

Japan contributes only 2 per cent of Indian business

PTI | March 25, 2011

The earthquake and subsequent tsunami in Japan will have short term impact on Indian IT exports to that country, NASSCOM president Som Mittal said today.

He said the impact of the calamity would be more on China as most of the Japanese manufacturing process is outsourced to that country.

"If you look at the impact, Japan contributes two per cent of our business. But surely it is growth potential for us. It is a focus country for us even though it is just two per cent," he added.

Mittal said there will be short-term impact for those companies invested in Japan and hoped that the country will spring back from the calamity soon.

"The area what we should watch out for us is the downstream impact on the rest of the world and on the supply chain. Japan is such an important part that there are suppliers of automotive companies, across the world that would be affected. Some of their manufacturing plants there had to be shut down due to power shortage," he explained.

The total exports of the Indian IT-BPO industry to Japan with majority of operations are centred in and around the Tokyo and Osaka areas. These cities are located far from the areas which have been impacted by the earthquake and tsunami.

So far, there has been no loss of property or life reported from the employees working in the Japanese operations of the Indian IT-BPO companies, Nasscom had said earlier.

Mittal said Indian companies operating there gave an option to the employees that if they want they can come back to India and similarly Japanese working in Indian companies can be relocated.

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