Ukraine’s Tech Work Could Shift Partly To India | India Business News - Times of India

Ukraine’s Tech Work Could Shift Partly To India | India Business News – Times of India

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BENGALURU: Many Indian IT firms have expanded their presence in Eastern Europe in the last few years, tapping into the pockets of great engineering and tech talent in these regions. With the Russia-Ukraine faceoff turning volatile, IT companies have triggered business continuity plans. Some experts believe this could lead to more offshoring to India.
GlobalLogic has nearly 8,000 employees in Ukraine. Infosys set up development centres in Karlovac in Croatia and Moscow in Russia to support Ansaldo Energia, a producer of thermoelectric power plants. Recently, Tech Mahindra bought Com Tec Co IT (CTC), a software solutions and service provider with development centres in Latvia and Belarus. Wipro has a subsidiary in Ukraine. The tech talent is concentrated in the cities of Kyiv, Kharkiv, and Lviv.
Peter Bendor-Samuel, CEO of IT advisory Everest Group, said the war in Ukraine is clearly going to cause both customers and vendors to shift production, at least temporarily, out of Ukraine and into other destinations. “We expect India to be the major recipient of this work as there are no other labour markets able to absorb work at this scale on short notice. We expect the engineering services sector to be most affected as much of the Ukraine delivery centres are focused on engineering and more specifically digital engineering. We can also expect firms with centres in Russia to move work as sanctions hit,” he said.
Hansa Iyengar, an analyst at London-based IT advisory Omdia, said Ukraine has always been a volatile region and many Ukraine headquartered firms had moved out of the country years ago (Luxoft moved from Kiev to Zug, Switzerland). “Those companies that do have a presence there will surely experience disruption, but most systems have a failsafe where workloads are moved to other locations as part of a continuity plan. So, most businesses and vendors will be insulated in the short term. However, in the long run this will be a critical factor impacting outsourcing decisions,” she said.
Pareekh Jain, founder of engineering services advisory Pareekh Consulting, said there are over 1,200 GICs in Eastern Europe and more than 100 delivery centres of service providers. “Ukraine IT services generated $6 billion revenue in 2021 and wanted to increase to $16 billion in 2025 which could have been 10% of Ukraine’s GDP. Now that will be uncertain and some of that work might be in other regions including India,” he said.
Bendor-Samuel said the supply impact will likely increase the pricing power of the service providers, who are already looking to raise prices in this high inflationary environment. Emails sent to TCS, Infosys and Wipro did not elicit a response till the time of going to press.

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