What started as a “perceived threat” is now looking more real. A slowdown in the US economy is around the corner, if the IMF’s World Economic Outlook that expects US growth rate to fall to 2.2 per cent from 3.3 per cent in 2006, is taken seriously.

So does India’s export-intensive IT industry have reason to worry, especially at a time when the rupee is fast appreciating against the dollar? When The Indian Express put this question to India’s top IT companies, they all said that India might actually stand to benefit from a slowdown. They said when budgets are slashed in a slowdown, companies outsource even more to cut costs and increase efficiency.

Even so, in order to safeguard themselves from a shock from the US, they are reducing their dependence on the US and diversifying to newer markets.

“Our dependence on the US has declined from 59.3 per cent to 54.3 per cent, while our revenues from Europe have gone up from 25.7 per cent to 30.2 per cent,” said Vineet Nayar, president of HCL.

Satyam’s chief financial officer, Srinivas Vadlamani, said the firm’s dependence on US is now below 60 per cent, sharply down from 85 per cent five years back. “We are exploring new markets like Asia Pacific, Japan and Latin America,” he said.

India’s second largest software maker, Infosys, too has seen revenues from Europe go up from 24.5 per cent to 26.4 per cent, as has NIIT.

Europe is a market that is leading the pack for diversification. “The Euro zone is experiencing its fastest growth in six years,” said the IMF report.

... contd.