Nasscom says negative Brexit impact short-term

CHENNAI: The IT Industry might suffer setbacks in the short run as a result of Brexit, said Nasscom president R Chandrasekhar, at the sidelines of the Nasscom HR Summit held in Chennai on Thursday. "Brexit will have minimal impact on HR as a function because it no longer matters who sits where and does work. From an operations perspective, we expect to see its impact in the next two-three quarters," Chandrasekhar said.
UK is the second largest market for Indian IT services industry, accounting for 17% of the total exports.Over 800 Indian companies employ 1.10 lakh individuals in the UK at present.
"The impact in the near term will be broadly negative. Due to the uncertainties around the pound value, current contracts may not yield as much. Large contracts including government contracts might involve longer decision making," he said. The strategy of using UK as a hub for entry into the rest of Europe might have to be revisited, he added.
Giving an optimistic outlook for the long term, Chandrasekhar said it would hold opportunities for the IT industry. "Post Brexit, UK will look at closer relations with other markets, primarily US, China and India," he said. With the large presence of IT companies in the UK, a deeper partnership with India could be in Britain's better interest. The IT industry can also expect possibilities of greater openings in the UK, he said. UK constitutes 17-18% of the India's IT export at present.
With uncertainties at the policy level after Brexit, Chandrasekhar said, "Mobility of employees will be a big question." As a consequence of Brexit, IT companies may have to set up operations both in the UK and EU and free movement of skilled labour could be impacted.