India's tech firms warn of possible economic fallout from Iraq war

  • Business
  • Thursday, 20 Mar 2003

BANGALORE, India (AP) - India's technology companies on Thursday warned that American policies that led to its attack Iraq might impact the global economy more than the war itself. 

"If the war is short, its impact on India's software industry will be minimal. But the larger concern is the confrontationist and big brotherly attitude of the U.S. that will hurt the global economy,'' said Arun Jain, chairman of Polaris Software Labs. 

"Trust is crucial for business and this trust has not been handled by the U.S. properly,'' Jain said. 

Other leaders in India's technology sector - which earns two-thirds of its income from the United States - said global trade barriers would go up again as a result of the war. 

"Due to this war, the world is going to become more protectionist,'' said Kiran Karnik, president of the National Association of Software and Services Companies, India's main software trade body. 

Pawan Kumar, chairman of VMoksha Technologies, a customized software company, said his company had already been affected by the war. 

Kumar said U.S. businessmen who had planned to visit his company to discuss a possible contract, had postponed their trip, without rescheduling. 

"A repeat of the situation that we saw immediately after the Sept. 11 terrorist attack is possible in the next few days,'' said L.S. Ram, executive director of CrossDomains, a company that provides customer support services to U.S. companies. 

After the Sept. 11, 2001 attacks, the number of phone calls made by U.S. customers to credit card companies, banks, telephone companies and other service providers plummeted by 90 percent. These calls are often routed to call centers in India. 

Despite the overall gloomy mood, Karnik saw some glimmer of hope. 

"People will move across the border less and less because of the war. When people do not move to where work is, work will have to more where people are,'' he said. 

"And the people needed for software writing are in India. So, more U.S firms will outsource software to India, due to the impact of this war.'' - AP 

To the Flashpoint Iraq website 

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