US real estate slowdown may hit India’s IT-BPM sector
The declining real estate market in the United States (US) could negatively affect India’s Information Technology and Business Process Management (IT-BPM) industry.
According to IT consultancy firm ITShatra, most India-based IT-BPM firms are closely associated with American mortgage banks and players.
Many top US mortgage banks established their GCCs (Global Capability Centres) in India. Prolonged slowdown in US housing market is likely to affect operations in these GCCs, leading to cost optimisation moves in these units.
ITShatra founder & CEO Sanjeev Dahiwadkar explaihned, “As mortgage demand has touched 22-year low in US, mortgage firms may put many technology projects on hold, while reducing the staff on BPM. So, any prolonged slowdown will lead to less number of outsourcing projects to Indian services providers.”
However, experts said that the overall BFSI vertical of Indian IT players may not be impacted much as many US banks have scaled down their exposure to mortgage industry post global financial crisis in 2008-09.
BFSI is the largest vertical for most big Indian IT firms with more than 30% of revenue coming from the financial services segment.
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