Nasscom head sees Brexit, Trump threats receding as reason replaces rhetoric

The fallout of last night's terror attack at Nice in France has some ramifications for India's IT sector. For one, US Presidential candidate Donald Trump has suddenly realised that he needs to show up his moderate face, and that is a good sign, believes Nasscom chairman C P Gurnani.

The threat perceptions of two recent global political developments – prospect of Donald Trump getting elected as the next US President and fallout out of Brexit – have got largely moderated, said Gurnani, who is also the chief executive officer of Tech Mahindra.

"The geopolitical world is definitely changing. Donald Trump has decided to show his sensible face post the terrorist attack at Nice in France as he has decided to defer his decision to announce his vice-presidential candidate. So, we believe that even if we see rhetoric during the campaign when it comes to business, it would be very very different," Gurnani said while addressing the audience at the Nasscom product conclave.

In the end, politics would see reason and would realise that global business needs to get connected and needs a seamless transfer of people, process and technologies and also access to markets like India, he said.

"When it comes to reality, everybody wants a pie of global business. After all, GE gets 70% of its businesses outside the US. And now we see every other day, a head of a multi-billion dollar US company is coming down to India, paying a visit to Prime Minister Narendra Modi."

This realisation would also ensure that the adverse provisions of the US immigration Bill which plans to restrict the issuance of H1B visas to Indian companies, would get blunted.

"US corporations realise that majority of their businesses come from outside the US and India brings in talents and knowledge processes. And in today's environment where technology tools are easily available, visas are only facilitators and not show stoppers," the Nasscom head said, adding that the industry body would make a presentation to the US administration after the elections.

The impact of Brexit would largely be short-term in nature and in the medium term, India would emerge a beneficiary.

"The new UK prime minister Theresa May would be a lot more moderate with her negotiations with EU and similarly, EU would be a lot more moderate in its negotiations with the UK as in a group everybody needs each other. My observations are, even as there would be some impact, those would be short-term. In the medium term it is going to benefit India, or at worse, won't hurt us," Gurnani said.

Even the threat of many headquarters of major global financial services companies relocating out of London post-Brexit has largely receded as there haven't been any such announcements so far, he said.

Gurnani's comments would provide balm to the anxiety of investors in the IT sector as the earnings season unfolds, with TCS CFO Rajesh Gopinathan described Brexit as "the elephant in the room" post media interaction on quarterly earnings.