COVID-19 Hits Indian Outsourcing: Financial Times

As the COVID-19 spreads in India, Prime Minister Narendra Modi announced a 21-day nationwide shutdown with a strict curfews and limitations on running non-essential businesses. The shutdown poses disruptions for one of India’s pillar industries – IT outsourcing serves many major multinational companies, such as Citibank and Pfizer. With more than 900 confirmed cases at outsourcing firms, IT companies have asked hundreds of thousands of employees to work from home and upgrade networks for remote work from homes. In addition, IT firms lobbied the government to allow some workers to perform critical functions at workplaces. India’s IT outsourcing industry hires about 4 million workers and generates annual revenue of US$180 billion. The shutdown in India and other outsourcing countries could encourage major customers in Europe and the United States to reduce reliance on India’s firms and manage their own internal systems. IT companies and staff try to adapt, and the industry association also suggests relying on force majeure clauses in contracts for confronting the challenge. – YaleGlobal

COVID-19 Hits Indian Outsourcing: Financial Times

India imposes nationwide shutdown to contain COVID-19; disruptions could encourage customers of India’s outsourcing firms to reopen their own IT departments
Benjamin Parkin
Saturday, April 4, 2020

Read the article from Financial Times about the struggle for India's IT industry to manage a nationwide shutdown and retain overseas customers.

Benjamin Parkin is the correspondent for the FT based in Mumbai.

Force Majeure Clauses in Contracts:   A party shall not be liable for failure or delay in the performance of an agreement for the period that such failure or delay is - beyond reasonable control of a party, - materially affects performance of any obligations under the agreement, - could not reasonably have been foreseen or provided against,   but will not be excused for failure or delay resulting from general economic conditions or general market effects
Broken contracts? Talib Visram, writing for Fast Company, anticipates many companies and individuals struggling with the COVID-19 crisis to trigger force majeure clauses in their contracts (Source: Contract Standards)

India IT Outsourcing Industry Revenue US Billions: Year	Revenue (billion USD) 2009	68 2010	74 2011	88 2012	101 2013	109 2014	118 2015	146 2016	143 2017	154 2018	167 2019	177
Disruptions: During the COVID-19 pandemic, numerous employees work from home and need IT support: companies may strengthen internal IT departments (Source: CEIC)

Copyright The Financial Times Limited 2020. All rights reserved.

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