Indian IT companies are unlikely to be hit by the uncertainty surrounding the US government shutdown and its possible impact on US?s healthcare programme, popularly called Obamacare.
Given that the Indian software sector’s exposure in this segment has remained minimal, large-scale damages are not expected.
The ambitious Obamacare programme is expected to throw open multi-billion dollars of IT business opportunities for the technology companies, and Indian firms such as Infosys and Wipro have signalled their keen interest in making deeper foray into this segment.
It is estimated that Indian IT industry could tap into an opportunity of around $20 billion.
Given that the healthcare market is very unlike other business segments, Indian IT companies have found it difficult to crack this sector, though certain efforts are being made.
Sid Pai, president, ISG, Asia-Pacific, a sourcing advisory firm, said, ?Indian IT companies do not have enough exposure in the Obamacare segment, so the impact will be very negligible.?
However, the first phase of the Obamacare has already been launched on Tuesday with the start of the insurance health exchanges in 50 states of the US and Indian companies like Wipro and Infosys have bagged certain contracts.
Infosys had formed a separate subsidiary focused on the US government and healthcare market in October 2009 called Infosys Public Services (IPS).
Wipro has also been placing its bets on this segment and has been engaged by one of the states in the US as the fiscal agent for processing all insurance claims related to this segment.
Pradeep Mukherji, president and managing partner, Avasant, an IT-BPO advisory firm, said that healthcare is a fast-growing segment but Indian IT companies have been traditionally weak.
?Indian companies future potential will depend on how well they will be able to position and market themselves in the US,? he added. The biggest hindrance for many of the Indian IT companies has been the lack of adequate local presence. The biggest challenge faced by the Indian IT companies while pitching for US government contracts, including healthcare, is perception. The strong brand associated with the Indian IT sector is of being an outsourcing destination.
Such an image has not helped companies in bagging these government contracts.
The shutdown of the US government due to the political deadlock between the Obama administration and the Republicans is also unlikely to have any major impact on the Indian IT industry as of now.
Nasscom, the Indian IT-BPO industry trade body, said, ?A majority of the business that our industry has is with the private sector, and is not directly dependent on federal spending. Hence we do not see an immediate economic impact. If, however, the shutdown continues for an extended period, there will be an overall macroeconomic impact that may affect the industry. Some services such as visa processing time that depend on federal budgets are expected to see delays.?
The earlier shutdowns in 1995 and 1996 lasted a total of 28 days.
The $108-billion Indian IT industry derives 60% of its revenues from the US. Given the size and scale of the US market, an increasing number of Indian IT companies are opening up development centres in the region to get closer to their customers. Wipro already has a strong presence in the US with a development centre in Atlanta. It plans to open two more such centres. Infosys and Mindtree, too, have such units.