Indian Banks and Insurance Companies Squeeze IT Vendors

During the preceding months of 2009, when the growth of healthy companies outside India had slowed to around three or four percent annually, Indian IT companies were clocking up eight to ten percent. Why weren’t they hit as badly by the global recession? Because they turned their sights on the Indian market and, to their delight, discovered salubrious springs of business there. LARGE springs.

The Indian banks and insurance companies were major sources of the warm, mineral-rich water that the IT companies were relaxing in while the rest of the world moaned. But it seems that after a while, those same banks and insurance companies got wind of how important they were to the health of the IT companies, and they decided to leverage this.

The Indian banks and insurance companies are now knocking on the IT companies’ doors with a smile on their face saying, “Seeing that we’re giving you all this business and keeping you well-fed, and that without us you’d be up the you-know-what creek without a paddle, maybe you wouldn’t mind re-negotiating our contracts worth $800 million to provide one hell of a more services for the same money. If you say no, you might regret it.”

Knowing how things go in India, the IT cos will join their palms in a namaste, touch the feet of the clients and murmur, “Whatever you say… you are our friend, philosopher and guide.”

Let’s see how it pans out… I’ll keep you posted.

Cheers,

source: livemint.com