Victims of US tech slump will be sold to India

Tumbling stock prices have opened the door for Indian firms to cherry-pick the smaller American technology firms - a trend that could dramatically shift the IT landscape.

Julian Stretch, export promoter for the South Asia Union of the UK's Department of Trade and Industry, said the signs are clear. "It wouldn't surprise me to see Indian off-shore companies pouncing on US companies, in order to help them move up the value chain," he told silicon.com.

The most visionary Indian software companies are well-placed to do this, he said, as they still have plenty of cash in the bank. Abhijit Roy, a consultant with Price Waterhouseglobal India, agreed that companies who had moved up the value chain from programming to services could benefit from the US's change in fortunes.

Satyam - one of India's leading IT services companies, has not been deterred by the US slow-down. Head of communications, SVL Narayan, told silicon.com that the company will definitely look for US acquisitions in the service sector once it has listed on a US stock exchange itself. "The economic change is an opportunity for us," he told Silicon.com.

Another effect of the US downturn is a turning of the tide of skilled emigrants to America. "There is already a small trickle of Indian contractors returning home after being made redundant by US employers," said the DTI's Julian Stretch. "They are having to choose between seeking alternative employment in the US under the same work permit, or coming home."

A United Nations report, Economic and Social Survey of Asia and the Pacific 2001, predicted growth rates in developing East Asian and Pacific nations would decline by no more than one per cent, due to the US slow-down.