Nearshore Americas

Despite Visa Fears, Indian Outsourcers Continue Winning Deals in the U.S.

Outsourcing contracts in the United States are increasing in number, given the earning predictions made by the Indian outsourcing service providers during their recent discloser of their financial results for the first fiscal quarter of 2013.

TCS, India’s largest outsourcing service provider by market value, has stated that “healthy” pipeline of outsourcing orders would further boost its sales this year. TCS’s statement came just a few days after Infosys made similar projections.

Tata Consultancy and Infosys get the bulk of their sales from companies in North America. The region contributed 62 percent of Infosys’s revenue in the year ended March, while Tata Consultancy made 53 percent of its sales in that market in the same 12-month period, according to Bloomberg.

Nasscom, India’s software industry lobby group, has forecast the nation’s computer services exports will expand as much as 14 percent, while TCS said it expects sales growth in the financial year to be above industry average.

TCS reported $636 million increase in net income, while Infosys announced more than 3 percent growth in profit. Interestingly, both the companies have seen outsourcing orders rising in the past few months.

Seven of the 10 large deals TCS won last quarter were from companies in the U.S., which suggests rising demand for information technology services in North America.

TCS, whose customers include giant financial services companies like Citigroup, won two new $100 million clients in the quarter. According to its statement, these contracts came from ‘a global aerospace major and a Nordic airliner.’

“U.S. companies are adopting technologies faster and looking for new ways to invest in technology,” said TCS CEO Chandrasekaran said in an interview with Bloomberg TV India.

According to a recent report from Gartner, global spending on IT services is likely to rise 2.2 percent this year.

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Analysts say the proposed changes in the US visa rule will affect the Indian outsourcing service providers. What certainly threatens them is a clause in the legal proposal that talks of imposing a limit on the number of company employees deployed at client locations inside the United States.

But the TCS has dismissed news reports that the new US visa rule would affect its business.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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