Prolonged war: A bane to business

The war in the Gulf has the potential to cast an ominous shadow on IT business. Vendors and partners do not want the war to prolong as they feel that its negative impact on the US economy could have its reverberations on the Indian business conditions as well. 

Says P V Viswanath, Country Manager - Commercial Channel, HP India, “The war has just started, there is a rise in fuel prices and fuel products for the last one month or so, which is going to affect customers sentiments in terms of money spent. Everyone is hoping that the war will be a short one and it will not affect the business sentiments.” 

But with the American leadership expressing uncertainty as to the duration of the war, Raj Saraf, CMD, Zenith Computers, feels that an extended war has the potential to dampen the demand which was showing some signs of growth. “If the war is prolonged, indecision in corporate and SOHO purchases will result. It is a wait and watch game right now,” says he. 

Leslie Lean, MD, Ansata Computers, is of the opinion that the war has not affected the 20-day cycle in hardware business uptil now. “But if the war prolongs, the impact would be felt,” he asserts. 

Opines Umang Mehta, Director Roop Technologies and spokesperson, TAIT, “If the war stretches longer, then the prices of consumer products would go up and SOHO buyers could hold back IT purchases.” Even corporates are expected to
postpone purchase decisions dampening business sentiments. 

Also, companies that want to invest in the country could wait till the war gets over. Says, SS Bapat, Country Champion-Uptime Solutions, Emerson Network, “If the war extends beyond 20 days, companies will defer their investment plans in India.”

That could come as a major blow to the overall growth of the economy of the country which has thrived on software exports.

Nasscom has pointed out that a prolonged war could have an adverse impact on the earnings through software. 

Points out Kiran Karnik, President, Nasscom, “Should the war drag on for weeks and months, then not only will the global economy be hit, but also the IT industry as travel, investment decisions and technology spending will be put on hold.”

However, supply of IT goods is not expected to be affected in a major way since these come mostly from south-east Asia.

“Even if the war gets prolonged, the channel business will not get affected from supply point of view since products come mostly from China and Taiwan,” says Rajesh Goenka, Divisional Head, Rashi Peripherals.

But manufacturers of IT products will have to watch out because input costs are expected to go up. In fact, Kamlesh Kathod of Bela Computers in Pune is an victim of this development already. Says he, “My input costs have gone up. We manufacture printer ribbons, and use plastic and nylon which are petro products.”

SYLVESTER LOBO

With inputs from Vinita Bhatia in Mumbai, Mohit Chhabra in Delhi and Sunila Paul in
Bangalore