Coronavirus: India eases lockdown restrictions for IT service providers

IT and business process outsourcing (BPO) suppliers in India will be permitted to have half of their staff on-site after the government announced changes to its Covid-19 lockdown rules.

Earlier this week (14 April), the Indian government announced that the lockdown of its 1.3 billion population, originally set on 24 March, would be extended until at least 3 May. India currently has about 12,000 Covid-19 cases and some 400 people have died as a result.

But following an announcement by India’s Ministry for Home Affairs on 16 April, IT services and IT-enabled services will be permitted to have 50% of their normal staff levels on-site from 20 April.

Other sectors that will see some easing of the restrictions include manufacturing and agriculture.

India’s government said that to “mitigate hardship to the public, select additional activities will be allowed”. But before these activities recommence, state governments will ensure that they still adhere to lockdown rules, such as social distancing.

The industry body that represents India’s IT services providers, the National Association of Software and Services Companies (Nasscom), welcomed the announcement. “Good to see the Ministry of Home Affairs directive stating that 50% of IT sector can go back to working from offices,” it said.

IT outsourcing and IT-enabled business process outsourcing in India is worth over £100bn and employs more than four million people. The shutting down of operations in the country also has a huge impact on global businesses that use these suppliers to run critical operations from offshore centres.

The industry’s biggest suppliers, including Tata Consultancy Services (TCS), reacted quickly to the lockdown with a project to quickly enable staff to work from home.

TCS scaled up its Secure Base Working Space initiative, which enables staff to service customers securely. Within weeks, the company made it possible for 85% of its global staff to do this. Before the pandemic, that figure was less than 40%.

TCS CEO Rajesh Gopinathan said: “We launched a massive programme to ensure business continuity using our Secure Borderless Work Spaces infrastructure, which allows TCS associates working from home, both onshore and offshore, to ensure business continuity with support from minimal associates working from offices.”

But smaller suppliers do not have the capacity to scale up home working to this level and, as a result, their customers, often western multinationals, will experience service disruption.

Outsourcing advisory ISG recently said that offshore service volumes are currently at about 80% of normal levels.

“The good news is that, on the whole, services are stabilising,” said ISG at a recent conference call. “The challenge is that the stabilisation is primarily focused on the large services providers. Smaller providers and enterprise captive centres are struggling to react to these unprecedented circumstances.”

BPO suppliers also face massive challenges in navigating the lockdown. BPO is all about IT-enabled data processing, and very often personal data. This requires consent to be given to process personal data from home. ISG added: “The implication of working from home creates new challenges for regulated industries because data needs to be processed.”

Also, staff in India providing voice support to customers of corporates in the UK cannot work from home because they will be unable to access the information about customers that they need to do their jobs.

Peter Schumacher, CEO at management consultancy The Value Leadership Group, said there is a lot of pressure on the Indian government to help such services. “This pressure is not just coming from the Indian service providers, but also the large multinationals that have captive centres in India,” he said.

But Schumacher said he hopes the pressure from business on the government does not lead to a premature relaxation of rules such as social distancing.