Premium Essay

Macroeconomic Shocks It Sector

In: Business and Management

Submitted By greedywolf
Words 1616
Pages 7
Introduction

IT industry and Globalisation

2008 Financial crisis and Impact on Indian IT sector

Response steps taken by Indian IT firms (HCL, Infosys and TCS)

Conclusion

Introduction

IT industry belongs to the servicing industry in India since India has not grown completely as Indigenous product developers in IT domain. So the growth and performance of Indian IT industry is completely attributed towards the institutions and organisations to which the software solutions or servicing is exported.

It is very tough to comprehend and list out the types of macroeconomic shocks that an IT industry would face. The main reason for this would be IT sector as a whole doesn’t provide its software solutions not just one sector. It provides software solutions to almost all of the sectors like Manufacturing, Retail, Insurance, Banking, and Media, Entertainment so much more and still has scope in so many unexplored domains.

Since the onset of globalisation in the early 90s, large capital influx and the crises that could be attributed with it have become one of the known risks. Large flows of capital into another country has created currency crisis in most of the countries. The most predominant of these shocks was recorded was in the East Asian countries. India never fell prey to these shocks and was effectively insulated from these shocks, until it has opened up its markets for investment by foreign players. The globalization and reforms of 90s despite opening up India’s market and providing employment and growth opportunities to millions, it comes with itself a huge risk of global market crash which incidentally would create a major shock in inflow of the capital into Indian markets.

Capital influx impacts the economy by impacting foreign exchange reserves, this in turn, impact the monetary base when monetary base is impacted the...

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