US Government Shutdown: No Immediate Impact to Indian IT Industries

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A government shutdown is entered by the United States federal government On October 1, 2013, forcing furloughs of 8 lakhs workers and suspension of services not exempted by the Anti-deficiency Act.

This shutdown may have shaken up the global market, but is there any impact Indian IT Industries has faced.

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Nearly for the first time in eighteen years, the US government shutdown as the Republicans and the Democrats not able to strike a deal on spending and budget mainly because of their differences over ‘Obamacare’, the flagship healthcare programme of President Barack Obama.

The White House instantly ordered the federal government agencies to start shutting down in spite of last minute hectic efforts from both sides, laying off thousands of workers and restraining some services for the first time since 1995-96.

According to engineering exports body at EEPC India:
The shutdown is a very bad development for Indian exporters who will face problems while doing business transactions. Trade facilitation activities like ports, cargo, regulatory clearances may get affected and result in holding up the landed cargo there.

Additionally, buyers may put pause on the fresh orders sue to absence of the essential trade facilitation. Furthermore, USA is one of the top purchasers of Indian goods & services. EEPC said, “The shutdown has come at a time when Indian exports were showing some signs of recovery and there were indications of the American economy shaping up again after five years of struggle following Lehman Bros collapse in 2008″.

This shutdown simple means that the routine food inspections will be suspended, national parks will close, government paper work will slow and many federal employees will be unpaid leave. Commenting on the USA shut down, Mr Kapoor said, “It is not only in India but also in America that political parties are polarised to extreme positions to the detriment of the common people, industry, trade and business”.

Some top Indian software exporters are doubtful to suffer from any huge loss of business because of the US government shutdown, said by experts. No doubt top Indian software firms have a contract with government of US in healthcare sector, but the effect are unlikely to impact, if this matter solves within 30 days.

Sid Pai, partner and president, Asia Pacific, at outsourcing advisory firm ISG said:
It is a temporary hiatus”. “The US government will go back to spending soon. Moreover, for the Indian heritage IT firms, it won’t have any huge impact.

According to spokeswoman at TCS, there would be no any impact of the US shutdown on the company’s business while Cognizant Technology Solutions Corp. and HCL Technologies Ltd keep mum on this matter.

As emergency and important services will be operated, thus, many government employees would not get their salary for the shutdown time.

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