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February 18, 1999


By CBR Staff Writer

Indian software firms are becoming more skeptical about accepting new Y2K contracts from international companies, according to Dewang Mehta, executive director of the National Association of Software and Service Companies (Nasscom). With time rapidly running out to fix the millennium bug there is still plenty of demand for the services of India’s large and highly-skilled software workforce and companies around the world still have large budgets to spend on the problem. But Indian companies, having already cashed in on the bug, are now starting to concentrate on the next major international challenges — electronic commerce and euro currency-related projects. They are also worried about the downside of taking on sensitive work at such short notice, and fear there may not be enough time left to meticulously reprogram millions of lines of code without there being glitches. The demand is still quite high but Indian companies are becoming much more choosy, Mehta told the Indian Financial Times. The millennium bug was hailed as a great opportunity for India, but firms are fast losing their excitement. The report also quoted S Ramadori, chief executive of leading software firm Tata Consultancy Services, as warning local companies not to rush into new Y2K contracts, even if a lot of money is being offered. Companies can get sued if they are unable to do a good job, and the time available now is not much, he said. An estimated 150 Indian companies have directly won international contracts to cure the bug, with hundreds more firms acting as sub-contractors to them. Mehta estimates that by the end of this year they will have won Y2K-related work worth about $2.5bn, of which around $500m worth is still ongoing or pending. In fiscal 1998-99, Y2K work is expected to account for about 25% of India’s total software exports of $2.7bn, he said. Most of the new contacts which Indian companies are accepting is for verifying and validating Y2K compliance for companies which have already been fixed.

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