The impact to Indian IT service providers from US automaker General Motors Corporation’s bankruptcy will be minimal, experts said. In the first three quarters of fiscal year 2009, GM outsourced IT services work worth just $67 million to Indian vendors, sources informed. While TCS and Wipro’s exposure amounted to about $44 million of the total, Satyam had work valued at $13 million, sources mentioned.
GM’s engagement in FY09 was a tad lower compared to FY08, sources noted. When reached for clarifications, TCS. Wipro and Satyam said their exposure to GM was not significant. The immediate impact on Indian service providers may show up in delayed payments from GM, followed by slow ramping down of existing projects, engagement manager at Zinnov Management Consulting Karthik Ananth said. Even in the long-term, service providers may not have much to look ahead from the company.
Meanwhile, major assets of GM are expected to be sold and most of them may be acquired by private investors or auto majors from Korea, China and even India. These countries would in the long term become potential clients for Indian service providers.