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Opinion
Andy Mukherjee

A US Recession Will Also Come to India’s Tech Hub

Western firms are still sending a steady flow of outsourcing deals, but the profitability of software exporters like Infosys is witnessing a sharp decline.

An Infosys Ltd. office building in the Electronic City area of Bengaluru, India.

An Infosys Ltd. office building in the Electronic City area of Bengaluru, India.

Photographer: Dhiraj Singh/Bloomberg

India’s tech industry is ruling out a US recession. Or so you would think from Infosys Ltd.’s cheery forecast of 14% to 16% annual revenue growth, slightly better than what the country’s second-biggest exporter of software services was projecting just three months ago.

The Bengaluru-based firm, which reported its June quarter earnings on Sunday, is considered the industry’s weathervane. If it’s optimistic about orders, then there’s reason to believe that the the deal pipeline isn’t drying up. US and European firms — from banking, manufacturing and retail to health care and utilities — are still entering offshoring contracts, particularly those that will help them automate processes to cut costs.