Kerala's IT sector might experience Brexit shock

THIRUVANANTHAPURAM: Since the UK represents about 17 per cent of the global IT exports from India, IT leaders in the state are concerned that the uncertainties triggered by Brexit will impact small and medium size IT companies having a large customer base in Great Britain.

However, they are also looking forward for fresh opportunities that may come up in strategic IT solutions for UK to emerge out of the impact of Brexit. Group of Technology Companies (GTech) chairman K. Nandakumar said that uncertainty for even a period of one year will impact the fortunes of small and medium companies who rely on the UK market for more than 30 per cent of their revenue.

GTech secretary Vijay Kumar P. said that the immediate impact would come from potential devaluation of the British pound, which could force companies to revisit many existing contracts.

“The biggest question is on what follows Brexit and Britain’s road map for economic ties with EU members. A positive sign is that UK may seek more value based and strategic solutions, products and services to emerge out of Brexit. This could open up more opportunities in the long-term,” said Mr Nandakumar.

He also said that since most Indian companies have had UK as the gateway to business in Europe, any stringent measures to free trade could necessitate trade negotiations with Germany, France, Netherlands and others. This could eventually lead to more focused gains from these regions.

Mr Vijay Kumar said that the state IT sector was expecting UK to further strengthen trade ties with India, to compensate for the loss of preferential access to EU markets. “That in turn could also facilitate migration of skilled talent from India to Britain more freely,” he said.