The Economic Times
Delayed relief
The US and the UK have finally decided that India is safe enough for their citizens to travel to. The decision is bound to be greeted with marked relief among Indian corporates, particularly those in the information technology business.
The US was among the first countries to issue "advisories” to its citizens warning them against travelling to India. Starting with its June1 advisory which suggested that all non-emergency embassy staff and dependants exit India, the US gradually upped the
ante, with its June 7 advisory "strongly urging” people to leave.
Most of the developed world, including the UK, Australia, Japan and the European nations, followed. The others have been quicker to withdraw their advisories.
Australia toned down the warning on June 24 followed by Japan a couple of days later, France revoked its advisory on July 7, Germany followed suit the next week and the UK did likewise on Tuesday.
The former US senator, Larry Pressler, has expressed the view that the US had pressed the panic button too soon and that the advisories exhibited an "exaggerated view of danger”.
An alternate view could be that it was one of the many means adopted by the Bush administration to bring pressure to bear on the Vajpayee government to diffuse tension. Whatever the real reason, it seems correct — at least with the benefit of hindsight — to
argue that it was overdone.
The reason why Indian corporates, and IT majors in particular, should be glad is that the US is among India's biggest trade partners and by far the biggest customer for the country's software industry.
Restrictions on travel were bound to have a direct impact on these businesses, not to mention on tourism. Infosys, for instance, has admitted that June being a "no visitor” month was one of the factors for its subdued earnings projections.
The direct impact apart, we cannot ignore the impact the image of a country as a dangerous place can have on potential investors. Not all the damage can be undone. But the revoking of the advisories at least limits it.
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