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Domestic IT, tech firms tread with caution as tension boils over
As the diplomatic ties between India and Canada continue to deteriorate, domestic IT firms, especially those which have business and offices in Canada, remain in a state of caution, adopting a “wait and watch" approach.
New Delhi: As the diplomatic ties between India and Canada continue to deteriorate, domestic IT firms, especially those which have business and offices in Canada, remain in a state of caution, adopting a “wait and watch" approach.
Indian IT companies like Tata Consultancy Services (TCS), Infosys and Wipro have invested heavily in Canada and have a significant presence there. These tech players have pumped in millions of dollars and created thousands of jobs in the country.
Industry experts expressed concerns that the current stalemate can delay new business deals and the movement of professionals between two nations. They stressed that a "favourable political climate" is essential for business growth.
Infosys has centres in Toronto, Calgary and Vancouver and in July, Infosys set up a new subsidiary in Canada under its US arm Infosys Public Services.
Headquartered in Ottawa, Infosys Public Services Canada will span over 10,000 square feet. The expansion followed a series of Infosys' investments in Canada.
“The IPS Canada announcement is the latest development in a series of investments made by Infosys, which has expanded the employee count to over 7,000, with a commitment to increase to 8,000 employees by 2024," the company had said in a recent statement.
Nasscom said they are in close touch with its members in Canada, and will engage with stakeholders to track the impact, if any, and support the IT and tech companies if needed, as New Delhi suspended visa services for Canadian citizens "till further notice".
"We are in close touch with our members in Canada and as per their feedback there are no immediate areas of concern," Nasscom said in a statement.
Since this is an evolving situation, "we will continue to engage with stakeholders to track any potential areas of impact that may need support".
Like IT biggies, the growing tensions between the two nations may become a source of worry for Indian startups.
Canada's Start-up Visa Programme has attracted several entrepreneurs to launch their businesses in the country.
Canada Pension Plan Investment Board is a major investor in the Indian startup ecosystem, which has invested in new-age companies like Zomato, Nykaa and Byju’s, among others.
Canada is also a significant source of capital for venture capitalists (VCs) and private equities (PEs) because of its sovereign wealth and pension fund pools.
In January this year, leading technology services and consulting company Wipro Limited announced the opening of its newest Wipro-AWS Launch Pad Center in Toronto, which will enable customers in Canada to accelerate their move to the cloud and build industry leading solutions leveraging Wipro and AWS expertise.
TCS teams across the US and Canada “consist of over 53,000 diverse, agile, and highly trained innovators who help nearly half of the Fortune 500 turn their goals into reality,” according to the company's website.
Canada also features among the top 10 countries in terms of assets held by the foreign portfolio participants or Foreign portfolio investments (FPI)s.
According to data from the National Securities Depository Limited (NSDL), the cumulative assets under custody (AUC) held by FPIs originating from Canada is around Rs 1.77 lakh crore.