consequnces of US recession on india job market

[newbiedelhi]

hI

can anybody enlighten be the aftermath on india job amrket in the specific sectors if US goes into recession in next 1-2 yrs? will there be job cuts ?

!) kpo
2) IT
3) Banking

[meghna2000usa]

there will be a negative effect on the indian job market in the shorter run but a lot of positives in the longer run.....time is running out for USA

[dhruvasagar]

@meghna:
What makes you come to that conclusion?


I believe that the US recession will surely have an impact on the India Job Market, especially companies who have more US clients.

But yes, the impacts on the Indian market will not be as drastic as those in the US market. That is what I believe.

[konqueror_vivek]

Originally Posted by newbiedelhi

hI

can anybody enlighten be the aftermath on india job amrket in the specific sectors if US goes into recession in next 1-2 yrs? will there be job cuts ?

!) kpo
2) IT
3) Banking

Yes, US economy will slowdown, growth rate being projected ~ 1% (Goldman Sachs), compared to India (8.9%) for FY'08. Moreover, if dollar depreciates further compared to south asian currencies, definitely it will be negative cues for IT, Textile, Offshore (KPO's and BPO's).
I believe, in second half of 2008, we might see US banks to show better results. Also, if RBI comes forward to save dollar depreciation, against Rupee, the current scenario could change. At this point of time, given the crunch situation, it is expected that there will be serious cost cutting in various sectors.

[dhruvasagar]

@konqueror_vivek
I totally agree, very well put.

[sandeepallu]

Originally Posted by newbiedelhi

hI

can anybody enlighten be the aftermath on india job amrket in the specific sectors if US goes into recession in next 1-2 yrs? will there be job cuts ?

!) kpo
2) IT
3) Banking

the impact of the recession will be definitely felt in IT sector,but job market in core engg,infrastructure will be good.also new players are entering the insurance sector and from 2009 RBI will allow foreign banks to step up their presence in india so overall the situation will not be that bad

[parmindersaluja]

Originally Posted by sandeepallu

the impact of the recession will be definitely felt in IT sector,but job market in core engg,infrastructure will be good.also new players are entering the insurance sector and from 2009 RBI will allow foreign banks to step up their presence in india so overall the situation will not be that bad

Remote Infrastructure Management (RIM): The Next Growth Opportunity for The Indian IT Services Industry

I dont think there is going to be the much touted negative effect on the IT industry, The margins may shrink coz of the appreciating rupee but that will be compensated with the sheer volume of outsourcing deals coming indias way as a measure to cut costs....check the report by nasscom in the link given above...

[man_on_mission]

Worst affected coz of US recession will be the service industry of india....under service industries come BPO, KPO, IT,ITeS..etc..Service industry contributes abt 52% to India's GDP growth...now if tat is going to get hurt den it will also hurt India's overall growth...But very slightly..India is not goin to face a major impact due to US recession..people may say tat der is goin to b a huge job loss due to recession..and will cite d xample of TCS firing abt 500 employees...but des wer employees who didnt perform or i feel des wer employees those wer on bench(TCS bench or for tat matter IT bench strength is always huge)..for cost cutting one hav to reduce Non performing asset and tat xactly wat has been done....i dont see any threat to the skilled ppl...according to NASSCOM INdia will have a shortage of abt 5 million skilled ppl in IT/ITeS...so der r lot of oppurtunity...

Appart from this India's travel, tourism and power industry is goin to grow @ a better rate...which is again a good sign..India hav a huge population so a huge comsumer base so we dont have to always depend on US for our growth...India's GDP is xpected to grow @8.5-8.9 % which is again way above the growth rate of US and only second highest in the world after China....

This recession gives us oppurtunity to be innovative and to think out of box so tat the US directly dont affect our robust growth...due to incresing Rupee...xporters r having a hrd time and dey r cryin foul for cut in key lending rates...but it has been noted tat our exporters r not tat efficeint...nd in past dey got the benefit of depriciating rupee...so now its time to be innovative more effective...increase the over all efficeincy and go for systematic cost cutting to balance the rupee effect...Infact der r lot of scope for improvement..in West Africa goods @ departmental stores r sold @ 5 times der indian price and Indian goods r not xproted to several countries in West Africa..Its an xcellent oppurtunity for our xporters...

Havin said tat..i must say US recession is goin to hurt India but only slightly...our Stock fall has actually shrugged off the "Decoupling Theory" which says tat developing economies r completely independent of US...but its not...Again our area of concern is our Agriculture which is goin to grow @ a lesser rate...same for our manufacturing sector (according to CSO)....

Bottom line is India will continue to grow robustly but @ a slightly lower rate...

[Cymba]

Look at the recession as a short term correction... What goes up must come down. Correction is as much a part of economies as they are for stock markets. It works in a cycle. In a country like America it has been observed that following 2-3 yrs of growth an economy suffers 3-6 months of recession as a correctional tool. (subprime crisis is wat triggered it this time)

Taking into a/c the size of the american economy and it being one of the major customers for world products, a slowdown in US is bound to affect other parts of the world. This creates a panic among ppl leading to overall negative sentiments which hampers growth further.

India will be affected by it in the short term (particularly in the IT sector), but as of now there shud be no major reason to panic for the longer term. And a survey where 90% of Indian CEOs are confident about growth prospects is testimony to that.

[aksbond4u]

If the US, in response to a slowdown, cuts interest rate drastically, that will widen the differential between Indian and US interest rates. This will have consequences through higher capital flows and rupee appreciation.thus margin of indian exports to US decreases. so naturally there wud be cost cutting and inclination towards higher efficiency. it is natural that if US sneezes then there are strong chances for india to get cold.
but slowdown in US wud force US companies to outsource their work more to countries like india thereby offsetting its some effect.