$1-trn US infra spend a boost for Indian IT

Bengaluru: Indian IT services companies are likely to benefit in the medium-term from the US Senate's move to pass the Bill for spending $1 trillion in infrastructure sector. The Bill, which was passed through bipartisan support on Saturday, aims to rebuild roads and bridges, modernize public works systems and boost broadband internet. Such huge spending is likely to generate two million jobs per annum over the coming decade.

Industry experts are of the view that such spending will create new outsourcing contracts for Indian IT services and engineering services companies as most of these projects will have an IT component.

US is the largest market for most Indian large and mid-tier IT firms with around 50-65 per cent of the revenues coming from this country. Indian companies usually participate in large government contracts in the US and the current spending decision on various infrastructure projects is likely to provide many such projects to bid for.

For instance, market leader Tata Consultancy Services (TCS) is competing to get a share of a $50 billion IT procurement contract floated by the US Government's National Institute of Health (NIH). Similarly, Infosys also works with various government projects in the US. "Such massive spending in the US definitely brings good news for the Indian IT industry as they will be able to participate in various government contracts. The positive impact can be seen in the medium-term," said Pareekh Jain, an IT outsourcing advisor & founder of Pareekh Consulting.

Apart from US spending decision, analysts are also pointing out that more investment commitment from nations during the COP26 climate summit will also boost spending on IT projects.