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May 13, 1998


Nuked for good?

Email this story to a friend. Has India shot itself in the foot? Killed the goose that laid the golden eggs? Will the shock waves from the Pokhran missile range flatten the world's fastest growing IT industry as sanctions are imposed from left right and above?


Say most industry experts whom Rediff polled immediately after word of the second set of nuclear tests began trickling into newsrooms across the country.

R Sivakumar, director, India Technology Centre, Intel:

Let me say at the onset that these are my personal opinions and not necessarily those held by Intel Corporation.

I think the Japanese sanctions will be far more interesting than the US sanctions because their investments are spread over a wide range of areas and we may be affected by their total withdrawal of aid and investment from India.

Let me also say at the onset that these developments are because of a political mandate while there is the cold reality of how it could affect our business; nobody is above the law, not even the software industry, and I don't think this is a one-way street.

Having said that let me add that if sanctions had been imposed on us 15 years ago, I'm speaking only of the software industry, then it may have had some effect. But today India is a major player in the field of (software) technology, and no unilateral decision can just be handed down to us to accept.

Overnight, India cannot become a pariah or a villain of the world.

Of course, there will be immediate reactions from various countries, but I think it is part of political rhetoric. When the dust settles, and there is another round of discussions over the negotiating table, India will be on a much more even playing field to explain her stand and fight these sanctions and I appreciate what India has done.

As of now, I do not foresee any major changes in the way we conduct business, even if there are tremors, eventually rationale will prevail and things will even out.

N R Narayana Murthy, chairman & CEO, Infosys Technologies:

I am not aware of details of the sanctions yet and in my view, I believe there should not be any trade sanctions imposed on the software industry. I can understand if they are imposed on areas of space and nuclear technology but not on software technology.

Especially, at a time now when we are approaching the year 2000 and when both the US and Indian companies are in a win-win situation. There is absolutely no logic in any country imposing sanctions on us.

I don't think our American depository receipt is going to be affected either as the ADR is just a listing on the US stock exchange and I don't see how it will come under any kind of stress.

In any case, I still don't know the extent of the sanctions and in which areas they are imposed just yet to fully determine its effects.

Som Mittal, managing director, Digital India:

The development has made it very difficult to explain. It is unfortunate and in the short term, the effects could be disastrous until some compromises are made and new equations worked out.

In effect, we will not be directly affected by the US sanctions because we have an understanding with our parent company in the US. Sure, this will cause a few glitches that we may have to sort out quickly.

I do not know the political compulsions that motivated our government to go ahead with the next two explosions, I'm sure this development was a well thought out strategy, keeping the economic implications in mind.

I am disappointed, as India will have to explain, justify and rationalise her decisions all the time.

I am told some of the sanctions are associated with a ban on computer exports and any technology related to computers is largely controlled by the US so there will be some definite fallout, to what extent, I am not able to say right now.

But I am sure sanity will prevail and the decisions of Western countries to impose sanctions on India will be thought out once again so that we won't be affected.

Dewang Mehta, executive director, National Association of Software and Service Companies:

I don't think the sanctions will affect the software industry. They will only stop US government aid. As far as software industry is concerned, we do not depend on aid. We are mainly dealing privately with the software sector in the US.

Over 141 of the Fortune 500 companies outsource from India today. The US has a shortage of 200,000 professionals today. India is helping out with the Y2K problem.

I think that right now we are just looking at a knee-jerk reaction, which means that people are talking about sanctions and want to know what it means.

Vinnie Mehta, deputy director, Manufacturers Association for Information Technology:

It's a mixed feeling. On a personal note, it makes you proud of the security and the fact that these issues are being given importance. Also, it is nice that finally we have come out in the open.

I don't think that the hardware industry would be affected as most of our imports are from Southeast Asia; places like Taiwan. Where the hardware is produced doesn't matter as most of our imports are routed through Singapore.

It's too early to comment about the sanctions as we don't know what exactly are they talking about.

I think we should sign the Comprehensive Test Ban Treaty now; then it would assuage some of the hurt. Bill Clinton will then see it as a victory for himself.

We don't know if they would put a ban on technology transfer. Unless we know the details, we have to be a little cautious. As of now, we cannot comment on anything.


(Despite the big bets the software major is laying in India, the company has nothing to comment on the situation).

- Compiled by Madhuri Velegar in Bangalore
Priya Ganapati in Bombay

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