Indian IT body shoppers in deep trouble - 12 per cent drop in quarterly profit of Patni sets the tone
Reena Roy
Feb. 7, 2008

Indian It companies make money trading It programmer to American or European companies. They gain from a differential hourly rate between what the American or European companies pay and what they pass on to the IT programmer. American companies used to hire these Indian IT developers through native Indian body shoppers to avoid the US labor department requirements on ‘employment’. It is the elite illegal immigration equivalent that made the American corporations rich at the cost of American middle class well paying jobs.

Things are changing, as the American corporations cannot cope up with increasing Indian wage inflation and American economic depression. On top of that some American companies have opened shops in India and native Indian young It professionals like to dump the native companies and opt for an American company like IBM India. The money is better and the projects are better.

The Indian IT body traders now face problem from three sides. First the dollar is losing value against Indian rupees. That bites deep into profit margin. Second, the Indian IT wages experience hyperinflation because of American companies hiring direct. Third, the economic depression in America makes it impossible for American and Europeans companies to continue to hire Indian IT programmers. During economic downturn, the contractual workers (temps) are first laid off.

India's Patni Computer Systems Ltd posted a 12 per cent drop in quarterly profit on Thursday as a stronger rupee hurt, and the software services exporter forecast weak earnings amid US recession concerns.

The new US President, whether it is Obama or McCain or Clinton, will impose strict restrictions on IT body or slave export to US through H1B or L1 visas.

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