Coronavirus outbreak may disrupt Indian IT firms' China operations

The spread of novel coronavirus in China could put Indian information technology firms in a spot, with sources in the know saying that workflow disruption is likely in coming weeks due to restricted mobility. However, so far, the companies have dealt with the crisis by allowing their employees to work from home as the Chinese New Year holiday has been getting extended.

The IT industry is one of the biggest Indian employers in China, with over 22,000 employees in the country, locals as well as expatriates, according to industry sources.

Of these, Infosys has over 4,000 and Wipro more than 2,000, with 98 per cent in the case of the latter being local.

The National Association of Software and Services Companies (Nasscom) is sending advisories and keeping in touch with the people of its member companies through groups formed on WeChat. The member companies have also formed WeChat groups of their own to keep in touch with their staff.

“People have been advised to work from home unless something extremely important comes up. Since this outbreak happened around the time of the Chinese New Year, everyone has been on an extended holiday. According to the latest extension, February 10 will be the day offices reopen, after which we will re-assess the situation,” said Gagan Sabharwal, senior director, Global Trade Development, Nasscom.

He said while there had been no information of employees contracting the disease, the member companies had been requesting face masks, which had been in short supply since the virus began spreading.

“Wipro has suspended travel to and transit through mainland China, including Hong Kong and Macau, until further notice. We have advised vigilance to our employees, especially those based in China and those who have visited the country recently. We have also issued an advisory detailing the hygiene and preventive measures and requested employees to immediately approach the nearest health facility in the case of any symptoms (of the disease),” a Wipro spokesperson said.

HCL Technologies, the third-largest IT firm in India, also has workers in China and said it was monitoring the advisories of the World Health Organization and local government in China.

“We have formed a special global task force to monitor the situation and take action in consultation with external agencies (International SOS). We have also requested employees to take protection as suggested by medical authorities. The ‘Remote Working /Work From Home’ strategy has been activated,” said a company spokesperson.

TCS and Infosys are also encouraging their employees to work from home.

A spokesperson for TCS said: “As a precaution, TCS has encouraged employees in China to work from home and halted all non-essential travel. Our business continuity plan is ensuring that there is no disruption in services.”

Similarly, sources in global IT services firm Capgemini said travel restrictions had been imposed to China and adjacent regions in the wake of the outbreak.

On February 2, India temporarily suspended the e-visa facility for Chinese travellers and foreigners residing in China. This could have an impact on resource movement in the longer term, said an industry executive.

Sabharwal said there were very few IT industry professionals in the Wuhan area who moved out successfully before the Chinese government’s lockdown of the region. Wuhan, in Hubei province, is the origin of the novel coronavirus outbreak, which causes respiratory illness and has affected more than 31,000 people globally, and caused 636 deaths in China and two outside the country.

As part of its efforts to reduce its dependence on the US and the UK, which together account for over 70 per cent of Indian IT exports, the industry has upped its efforts in the last few years to create more opportunities in China. Asia currently constitutes 8 per cent of IT export revenue. It has programmes that have been put in place with help from governments on both sides, in addition to companies setting up their own centres in China, whose IT spend is more than $35 billion.


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