Brexit: Indian software industry is getting ready to battle currency fluctuation and cut in spending

It’s decided! Britain is taking an exit from the European Union, and this decision has already started to create its rippling effects on the world economy.

As currencies world over get ready to adapt to the changes in the global economy, India's $150 billion software services export industry, because of a huge market in Europe, is also pulling its stocks up. The need, one may ask, has come because the immediate future is going to be full of uncertainty and disruption, where currency would fluctuate and the tech giants of Indian software industry would be forced for a cut in IT spending.

Also read: Arun Jaitley says India is very well prepared to deal with Brexit shocks to the economy and markets

Nasscom, the IT industry body of India, has said that while the extent of Brexit impact is yet to be fully measured, one can’t rule out the fact that there is going to be a huge change in the global environment. This is also the reason why Indian IT industry needs to gear up to bear a short-term impact ranging to two-three quarters, where they would have to cut their IT spending.

Also read: India has got what it takes to survive Brexit, says Economic Affairs Secretary

"There is also an immediate impact due to the currency, the GBP has already fallen by 8-10%," Sangeeta Gupta, senior VP, Nasscom, told ET.

Top Indian IT companies, viz. TCS, HCL, and Tech Mahindra, have a major part of their revenues coming in from the European region, with UK being the second largest market for Indian IT services industry. In the past, Indian IT firms have entered enter Europe via UK, headquartering themselves in London for their operations.

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