New ways to milk the golden goose is being found: Mindtree CEO Krishnakumar Natarajan

CEO and Managing Director of IT firm Mindtree Krishnakumar Natarajan thinks protectionism in the developed world is now for real. The IT industry feels targeted and is asking for support from the Indian government. Excerpts from an interview.   

Is protectionism now for real or is it a rhetoric because of U.S. elections?

Protectionism is real. There is a rise in visa costs. Enough value has not been given to the jobs that have been created by the Indian IT industry or the amount which the professionals from the Indian IT industry pay to both the federal and state governments as taxes (in the U.S.). That is taken for granted and new ways to milk the golden goose is being found, which reflects of protectionism. But it gets more visibility during an election year.  The fact is how long can the industry pay for initiatives that the government should fund out of its own coffers? You can't keep milking the golden goose all the time. People will find other ways of getting the business done without depending on the visa environment.

All the more reason the Indian IT industry should be more competitive now?

That's true. But it is not just happening in the U.S. The U.K has also followed. To that extent, everyone in the industry sees that the industry in India has reached the stage of leadership in the global arena. How do we extract our pound of flesh from them? In this case, there needs to be some level of support from the local government. The industry also has to recover some of these costs. May be, part of the costs will get passed on to the customer. Clearly, external realities are pointing out to protectionism that needs to be partly offset by local support.

What do you make of the current demand scenario?

The demand scenario is okay right now. There seems to be a consensus that the developed markets are running the risk of getting into a recession during the latter half of the year. So it is important that the clarifications regarding SEZs get done. It is really important for service providers to become more competitive.

What's your ask from the government when it comes to SEZs?

SEZ  concessions are not going to be there.  But whatever started, they would get "grandfathered". But there is a constraint saying that in a new SEZ, there needs to be new business, with new people, and with new assets. In a market scenario where people are looking for efficiency and you are trying to retain market share by driving productivity, you need the flexibility in terms of leveraging current assets and people. Saying that the same people can't be used in a new unit of SEZ, doesn't appear to be the most logical thing to do. During the Chennai floods, a number of SEZs went out of action. But to provide continuity of business, people and physical assets had to be moved.  But you cannot do it.

What about the ease of doing business?

Digital India will change the ease of doing business. What will be the execution approach on that? How will you make the procurement process in the government more transparent? How do you make sure that vendors who work are paid? Not much has changed. So make sure that the whole process is efficient and ensure that the ease of business is not restricted to foreign companies starting businesses here.