Comment by Riaz Haq on June 16, 2023 at 7:38am

Bad times are just starting for #India's #IT outsourcers. JP Morgan has concluded "the demand environment for IT services has likely weakened further in June." All of FY2024 is going to be a 'washout' #technology #exports
https://www.theregister.com/2023/06/16/indian_it_services_grim_outl... via @theregister


JP Morgan has predicted tough times are around the corner for India's big IT services outfits.

In a report released Wednesday, based on meetings with 15 players, the firm concluded "the demand environment for IT services has likely weakened further in June."

Author and JP Morgan's head of APAC telecoms and India TMT research Ankur Rudra noted "increased competition for a smaller pie could trigger falling win-rates, pricing and deteriorating deal terms" and projected that deferred project starts, project halts and cancellations are likely to persist.

The firm predicts recovery for the industry isn't likely over the next six to nine months, making all of calendar 2023 – indeed all of financial year 2024 – a "washout."

JP Morgan previously expected that only the first half of 2023 would be tough for India's tech services sector. It's since trimmed its estimates of the industry's revenue by one to three percent for Q1. The report also suggests the sector will not deliver investors' hoped-for revenue figures or growth expectations for around a year.

The report cut JP Morgan's view of Tata Consultancy Services FY24-25 revenues and earnings by one percent, noting that "the unexpected CEO departure could lead to periods of volatility in a time of weaker tech spend and rapidly evolving macro." That's a reference to K Krithivasan taking over from Rajesh Gopinathan as CEO of TCS earlier this month. After 34 years with the firm, Gopinathan stepped down "to pursue his other interests."

JP Morgan also cut its outlook for Infosys by one to two percent over FY24–FY26. Wipro and HCL Technologies predictions went unchanged.

Rudra advised the tough times facing the industry represent a chance for investors to take a short position – potentially profiting from the sector's woes.

India's top outsourcers struggled to hire and retain talent during 2022, when their order books ballooned. In the months since, the industry worried that workers didn't have enough to do and even reneged on job offers.

Tata Consultancy Services (TCS) CFO Samir Seksaria called FY23 "a year of transition" in the firm's Q4 2023 earnings statement. For most Indian IT outfits, that quarter was marked by missed revenue targets and slowed pipelines.

"There is a slowdown, but still, we believe there is a floor level which will be higher than the pre-pandemic cycle. And the time to recover also should be shorter," said HCL CEO C Vijayakumar in his firm's Q4 2023 call.

However, JP Morgan has ruled out any quick recovery, predicting less than five percent year-on-year growth. ®

Comment by Riaz Haq on June 16, 2023 at 4:09pm

Interview: India’s exaggerated value and the danger of S Jaishankar’s ‘new world order’ posturing


https://scroll.in/article/1049569/interview-indias-exaggerated-valu...

“the US already has other military partners like Japan and Australia, whereas India doesn’t really have anyone else that can help balance against China. Our value to the US is being partly exaggerated”


Rajesh Rajagopalan, author and professor of International Politics at JNU, says we are living in a bipolar age and it is dangerous for India to think otherwise.
Rohan Venkataramakrishnan
18 hours ago


“I think the economics of the world, the politics of the world, and the demographic of the world is making the world more multipolar.”

“The world is moving towards greater multi-polarity through steady and continuous re-balancing.”

“The Indo-Pacific is at the heart of the multipolarity and rebalancing that characterises contemporary changes.”

“The United States is moving towards greater realism both about itself and the world. It is adjusting to multipolarity and rebalancing and re-examining the balance between its domestic revival and commitments abroad.”

Those are all comments by Indian External Affairs Minister S Jaishankar over the last few years. Indeed, Jaishankar is a big votary of the concept of multipolarity – the idea that the world is not dominated by just one power (the United States), or two (the US and China, just as it was the US and the United Soviet Socialist Republic during the Cold War), but is instead now seeing a global order with a number of powers that are somewhat equally matched in terms of economic and military capacity and influence.

Jaishankar sometimes speaks of the need for establishing a multipolar world. And sometimes his comments seems to suggest the world is already multipolar or will soon be there.



Not everyone agrees. Stephen G Brooks and William C Wohlforth, in a Foreign Affairs article in April , argued that multipolarity is a “myth”.



Brooks and Wolworth argue instead for “partial unipolarity”, in part because Chinese military power remains “regional”.

Rajesh Rajagopalan, professor of International Politics at Jawaharlal Nehru University and author of Second Strike: Arguments about Nuclear War in South Asia, thinks the answer is clearer: We are living in a bipolar age. And it is dangerous for India to think otherwise.

I spoke to Rajagopalan about multipolarity vs bipolarity, why he thinks that Jaishankar describing the world as multipolar is problematic even if it is a purely rhetorical tactic, and what he made of Ashley Tellis’ much discussed piece from earlier this month – with the controversial headline, “America’s Bad Bet on India” – which argues that the US should not expect India to side with it in a military confrontation with China, unless its own security is directly threatened.



To start off, how do you read Jaishankar and India’s articulation of a multipolar world, either as an aspiration or as a reality?

I’ll start with the reality: Of course, it is not [a multipolar world].

There are different ways of defining polarity. Academics by and large look at it as either unipolar world or a transition to a bipolar word. Some argue that the world may be bipolar in the Indo-Pacific region because of China’s power there, but not bipolar in a global systemic sense. Since this is a peaceful period – not marked by war – it’s very hard to identify the boundary between unipolar and bipolar. But my sense as an analyst is that the world is already bipolar, because the way polarity is measured is purely in terms of material capacities, and on this, clearly China has the wealth and the intention.

Comment by Riaz Haq on June 16, 2023 at 4:11pm

America’s Bad Bet on India | Foreign Affairs


https://www.foreignaffairs.com/india/americas-bad-bet-india-modi

By Ashley Tellis

For the past two decades, Washington has made an enormous bet in the Indo-Pacific—that treating India as a key partner will help the United States in its geopolitical rivalry with China. From George W. Bush onward, successive U.S. presidents have bolstered India’s capabilities on the assumption that doing so automatically strengthens the forces that favor freedom in Asia.

The administration of President Joe Biden has enthusiastically embraced this playbook. In fact, it has taken it one step further: the administration has launched an ambitious new initiative to expand India’s access to cutting-edge technologies, further deepened defense cooperation, and made the Quad (Quadrilateral Security Dialogue), which includes Australia, India, Japan, and the United States, a pillar of its regional strategy. It has also overlooked India’s democratic erosion and its unhelpful foreign policy choices, such as its refusal to condemn Moscow’s ongoing aggression in Ukraine. It has done all of this on the presumption that New Delhi will respond favorably when Washington calls in a favor during a regional crisis involving China.

Washington’s current expectations of India are misplaced. India’s significant weaknesses compared with China, and its inescapable proximity to it, guarantee that New Delhi will never involve itself in any U.S. confrontation with Beijing that does not directly threaten its own security. India values cooperation with Washington for the tangible benefits it brings but does not believe that it must, in turn, materially support the United States in any crisis—even one involving a common threat such as China.

The fundamental problem is that the United States and India have divergent ambitions for their securitypartnership. As it has done with allies across the globe, Washington has sought to strengthen India’s standing within the liberal international order and, when necessary, solicit its contributions toward coalition defense. Yet New Delhi sees things differently. It does not harbor any innate allegiance toward preserving the liberal international order and retains an enduring aversion toward participating in mutual defense. It seeks to acquire advanced technologies from the United States to bolster its own economic and military capabilities and thus facilitate its rise as a great power capable of balancing China independently, but it does not presume that American assistance imposes any further obligations on itself.

As the Biden administration proceeds to expand its investment in India, it should base its policies on a realistic assessment of Indian strategy and not on any delusions of New Delhi becoming a comrade-in-arms during some future crisis with Beijing.

Comment by Riaz Haq on June 16, 2023 at 4:29pm

Blow for TCS! Transamerica Life Insurance cuts short $2 billion contract with Indian IT giant


https://www.businesstoday.in/latest/corporate/story/blow-for-tcs-tr...

The deal between TCS and Transamerica Insurance was signed in January 2018, as per a release by the IT services company. The deal ensured that TCS earned at least $200 million in annual revenue.

India’s largest IT services company, Tata Consultancy Services (TCS), has confirmed that its 10-year deal with Transamerica Life Insurance Company, which was signed in 2017, has been ended before completion due to the current macro-economic environment. The 10-year deal was worth $ 2 billion.

The company said in a statement, “Considering the current macro environment and respective business priorities, Transamerica and TCS have mutually agreed to end the administration arrangement for Transamerica life insurance, annuities and supplemental health insurance, and other employee benefit products.”

The deal between TCS and Transamerica Insurance was signed in January 2018, as per a release by the IT services company. The deal ensured that TCS earned at least $200 million in annual revenue. The release from January 2018 also highlighted that TCS was signed to simplify the service of more than 10 million policies into a single integrated modern platform.

“Transamerica and TCS will work together to ensure a smooth transition of the administration of these products to a new servicing model, which we expect to take approximately 30 months,” they added.

For the financial year 2022-23, TCS has reported a 14.8 percent year-on-year (YoY) increase in consolidated net profit. The profit for the quarter ended March 31, 2023 stood at Rs 11,392 crore.

The consolidated revenue from operations of the IT company came in at Rs 59,162 crore, up 16.9 per cent, from Rs 50,591 crore YoY. In the December quarter of FY23, it stood at Rs 58,229 crore.

The revenue rose 10.7 per cent year-on-year (YoY) in constant currency (cc) terms. Earnings before interest and taxes (EBIT) stood at Rs 14,488 crore with EBIT margin contracting 0.5 per cent YoY to 24.5 per cent. Net margin came in at 19.3 per cent.

This development comes as the IT services company's new CEO, K Krithivasan, started his term on June 1.

Comment by Riaz Haq on June 17, 2023 at 7:35am

#India’s #Modi is a right-wing despot — not a rock star. Modi, like his far-right contemporaries & fascists from past, has the ability to draw large, adoring crowds in his own country & from diaspora overseas. That includes #US, where he will be flying in this week for his first official state visit. https://chicago.suntimes.com/columnists/2023/6/17/23759480/narendra...

Hate and fear coated with the veneer of economic prosperity sells.

So Indian Prime Minister Narendra Modi, like his far-right contemporaries and fascists from the past, has the ability to draw large, adoring crowds in his own country and from the diaspora overseas. That includes the United States, where he will be flying in this week for his first official state visit.

President Joe Biden and some other Western leaders may have serious concerns about India’s belligerence against its religious minorities, particularly Muslims, oppressed castes, dissidents, journalists and other marginalized groups.

But the politicians have found themselves playing along, publicly sidestepping Modi and his Bharatiya Janata Party’s horrific human rights record for the sake of bolstering a strategic relationship with India, in hopes of countering China’s influence in the Indo-Pacific and possibly Russia’s aggression.

“I should take your autograph,” Biden reportedly joked to Modi at a summit in Japan last month. Biden went on to tell the Hindu nationalist that the White House has been inundated with invitation requests for his upcoming stop in Washington, D.C., according to the Indian press.

“You are too popular,” Biden apparently gushed, as if he were a nerd talking to the coolest kid in the high school cafeteria, not the despot who was once banned from the U.S. for his alleged complicity in the deadly 2002 Gujarat riots.


Australian Prime Minister Anthony Albanese also piled on with the flattery recently, likening Modi’s stage presence to rocker Bruce Springsteen’s. That’s an insult to the Boss, who has spoken out against Donald Trump’s Muslim ban and wrote a song that features qawwali, devotional music deeply rooted in Islam.

If anything, Modi has more in common with the bombastic and bigoted “Motor City Madman” Ted Nugent, who has compared Muslims to Dalmatians that bite.

When asked by Reuters in 2013 about the massacre in Gujarat, Modi, then chief minister of the western Indian state, also pulled out a dog analogy of his own. Modi didn’t express much remorse about the violence that left more than 1,000 people, mostly Muslims, dead. But he did say he was about as sad as he would be if someone drove over a puppy.

Modi, long suspected of failing to stop the bloodshed in Gujarat, was unable to set foot in the U.S. for nearly a decade under a little-known law that bars foreigners who have committed “particularly severe violations of religious freedom.”

But since he was elected prime minister in 2014, Modi has been allowed to slither back in to rile up support from Indian Americans who share his views of Hindu supremacy, or are at least willing to ignore it.

Comment by Riaz Haq on June 17, 2023 at 7:35am

#India’s #Modi is a right-wing despot — not a rock star. Modi, like his far-right contemporaries & fascists from past, has the ability to draw large, adoring crowds in his own country & from diaspora overseas. That includes #US, where he will be flying in this week for his first official state visit. https://chicago.suntimes.com/columnists/2023/6/17/23759480/narendra...

Modi advocates in the U.S. consistently appropriate the language of social justice in an attempt to discredit other Americans of Indian descent from all backgrounds and faiths who are trying to raise awareness about the deteriorating conditions in the country they or their parents once called home.

This weekend, Modi fans, giddy over his state visit, are holding “unity” marches in several major cities, including Chicago. Unbeknownst to most Americans, this unimaginative bunch is shamelessly stealing a page from the playbook of Indian opposition Congress party leader Rahul Gandhi, who walked over 2,000 miles across India to unite his fellow citizens against divisiveness spread by Modi’s government.

Gandhi, who just finished a speaking tour in the U.S., was sentenced to two years in prison and booted from Parliament a few months after he completed the Bharat Jodo Yatra — Unite India March — earlier this year.

The offense? Pondering aloud, in a 2019 rally, why “all thieves” have Modi as a surname.

Modi may have stolen the hearts of some Indians, but they don’t represent the entire 1.4 billion-plus population. Similarly, many of us Indian Americans won’t feel seen when Modi is cheered on as Biden rolls out the red carpet.

Before Modi’s arrival in D.C., Human Rights Watch and Amnesty International will be screening the damning two-part BBC documentary that was blocked in India for raising questions about his culpability in Gujarat.

Protesters are also expected to flock to the capital and other parts of the country, to remind lawmakers and fellow Americans the carnage in Gujarat was just a gory trailer to the horror show that has since taken center stage in Modi’s India.

“I don’t think Modi’s foreign visits affect Muslims in India, except that some of us cringe at the spectacle,” a journalist from India told me. “... the struggles remain the same.”

The global lovefests have also left many of us wondering if Modi will ever be held accountable, leaving future generations to ask, once again, why so many from the international community stood by, watched and did nothing.

Rummana Hussain is a columnist and member of the Sun-Times Editorial Board.

Comment by Riaz Haq on June 17, 2023 at 5:05pm

Excerpts of "India is Broken" by Princeton Economist Ashoka Mody


And economic inequalities now had become much wider. With exquisite timing, on April 22, four weeks into the lockdown, Vogue India invited its readers into another Mumbai world, the twenty-seven-story Mumbai home of Mukesh Ambani, India’s reigning business tycoon and one of the world’s richest people. The Ambani home, located eleven kilometers (seven miles) away from cramped Dharavi, has ceilings so high that the structure is tall as an average sixty-story building. It is equipped with three helipads, a theater that can accommodate eighty guests, a spa, and a garage for 168 vehicles. The “sun-kissed living area” offers a “breathtaking view of the sea.”11

In the India of 2020, the Hindu-Muslim divide and egregious economic inequalities were reverberating echoes of Bengal in the 1940s. And disconcertingly, despite decades of economic progress, the echoes also sounded in the economic desperation of the reverse trek from the city to the village. The ongoing reverse trek revealed the continued risk of sudden income loss, health catastrophe, and the loss of even woeful living spaces: it revealed an India that was broken for hundreds of millions of Indians.12 This book is my attempt to explain why India, for so many, is broken.

Mody, Ashoka. India Is Broken (p. 5). Stanford University Press. Kindle Edition.

Comment by Riaz Haq on June 17, 2023 at 5:07pm

Excerpts of "India is Broken" by Princeton Economist Ashoka Mody


The grim reality is that, to employ all working-age Indians, the economy needs to create 200 million jobs over the next decade, an impossible order after the past decade of declining employment numbers.1 Right from independence, the Indian economy produced too few jobs. For more than 80 percent of Indians, the informal sector employment became the safety net, where workers idled for long stretches, earning below- or barely-above-poverty wages. Demonetization in 2016, a poorly executed goods and services tax in 2017, and COVID-19 in 2020 and 2021 struck hammer blows on the informal sector while creating no new options. Indeed, technology accelerated job destruction, especially in retail and wholesale trade. More Indians just stopped looking for work.

Set against this bleakness, many pundits and leaders look back to celebrate and draw hope from India’s high GDP growth rates of the 1990s and 2000s. That celebrated celebrated growth, however, was an outcome of unusually buoyant world trade, rampant natural resource use, and a domestic finance-construction bubble. Even as wealthy Indians accumulated astonishing riches, job creation remained weak. The most severe forms of poverty came down, but still afflicted over 20 percent of Indians; another 40 percent lived precariously, ever at risk of falling back into a dire existence. The median Indian lived in that vulnerable zone—and, looking through a government-induced data fog, still lives there.

The unchanging problem through the post-independence years has been the lack of public goods for shared progress: education, health delivery, functioning cities, clean air and water, and a responsive and fair judiciary. Along with scarcity of jobs, the absence or poor quality of public goods makes the lived reality of vast numbers


Mody, Ashoka. India Is Broken (pp. 398-399). Stanford University Press. Kindle Edition.

Comment by Riaz Haq on June 17, 2023 at 5:07pm

Excerpts of "India is Broken" by Princeton Economist Ashoka Mody

On July 1, 2017, with the economy barely back on its feet from the demonetization shock, the government rolled out the goods and services tax (GST). The GST was a worthy initiative. Its primary goal was to get rid of cascading taxes (taxes on taxes). Under the pre-GST system, a manufacturer would pay sales tax on inputs such as the steel he purchased from another state. He would include the taxes paid on steel and other inputs in determining the price he charged for the pots and pans he produced. His buyer would then pay sales tax on that all-inclusive pots and pans price. The GST would prevent these compounding costs. It would levy tax only on the value added by the producer of pots and pans through a system for refunding taxes paid on inputs. Importantly, the GST also sought to create a common market with uniform tax rates throughout the country, collapsing into one system the widely varying types and rates of taxes charged by different states.

The GST was decades in the making because it required integrating the complex system of central and state indirect taxes. It also required the agreement of all states, which would not be able to set tax rates when formulating their fiscal policies. Narendra Modi as Gujarat’s chief minister had long stymied the initiative.


India needed GST, but its rollout was an economic and administrative mess. States demanded that their large revenue earners—taxes and duties on petroleum, alcohol, electricity, and land transactions—be excluded from the GST net. Those exclusions undermined the objectives of reducing taxes on taxes and creating a common market with uniform rates across the country. Also, active lobbying led to arbitrary differences in tax rates on different products. Most immediately, though, onerous reporting requirements, poorly functioning online reporting and information systems, and inadequate training of tax officials made matters intolerable for businesses. Small firms were unable to cope with the new system. They went into a seizure for the second time in less than a year.31

Mody, Ashoka. India Is Broken (p. 342-343). Stanford University Press. Kindle Edition.

Comment by Riaz Haq on June 17, 2023 at 5:08pm

Excerpts of "India is Broken" by Princeton Economist Ashoka Mody


The Indian GDP growth story was nearly over. In its 2018 annual report on India, the IMF confirmed that the demonetization and GST implementation shocks had taken a significant toll on the Indian economy. Non-performing loans of banks (loans that were not being repaid on time) had risen from about 4 percent of all loans in late 2014, when RBI governor Rajan first rang the alarm bells, to about 9 percent in 2017. For government-owned banks, almost 12 percent of all loans in 2017 were non-performing (Figure 21.3). The government had done little to discipline big companies for not repaying their debts. Instead, the government once again used scarce taxpayer money to refill the hole that the defaults left in the capital of the banks they owned. These bank recapitalizations added up to about $13 billion in the fiscal year 2017–2018, with similarly large amounts anticipated in each of the next two years. Choked with bad loans, major government-owned banks drastically slowed their lending. The industrial sector, saddled with debt, virtually stopped borrowing. Although GDP growth remained mysteriously high—above a 7 percent annual rate—corporate investment was evaporating.32


Mody, Ashoka. India Is Broken (pp. 343-344). Stanford University Press. Kindle Edition.

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