With India and Pakistan poised on the verge of war, the leaders of India's booming high-tech sector worry that a current spate of canceled business trips will extend into a slowdown in foreign investment or sales.
US companies with Indian operations, such as Hewlett-Packard, Sun and Intel, have banned nonessential travel to India or raised security alerts -- or both.
HP has told its 2,600 employees, mainly Indian nationals, that they can leave the country if they feel at risk.
"We are beginning to see some customers and prospects canceling their business visits to India," said Kiran Karnik, president of India's National Association of Software and Service Companies. "If the tension prolongs, it could hit business opportunities abroad for our software companies."
Fears of a nuclear conflict between India and Pakistan have escalated in recent weeks -- although Wednesday brought some easing of tensions when Indian Prime Minister Atal Bihari Vajpayee called on Pakistan to jointly monitor their disputed Kashmir border.
India's powerhouse software sector -- worth 370 billion rupees (US$7.7 billion) in the year ending in March -- has two-thirds of its customers in the US. As tensions worsened between India and Pakistan, the State Department last week urged the 60,000 US citizens in India to consider leaving.
Karnik, who did not have precise figures on cancellation of visits by prospective customers, said they had not yet led to any drop-off in new orders. However, he said that could change in the face of a drawn-out standoff.
"We only hope for an early end to this," he said.
Top Indian software firm Infosys Technologies -- based in the southern city of Bangalore, India's Silicon Valley -- also said some customers were calling off planned visits.
"We have not seen any material impact on our business so far, but if the situation worsens, there may be concerns," said Nandan Nilekani, Infosys' chief executive officer.
Senior officials at high-tech firms say they are making contingency plans, such as copying data and programs to enable them to operate from "mirror locations" abroad in the event of a catastrophe.
The Sept. 11 attacks -- coupled with that of Dec. 13 on India's Parliament -- were a wake-up call on the need for disaster planning, said Karnik. "By now, we know how to cope with such uncertainties," he said.
Hewlett-Packard Co spokeswoman Rebeca Robboy said HP permits employee travel to India only if critical to the business, and an HP general manager must sign off on any such trips.
Intel Corp has told its 1,200 Bangalore-based employees, mainly Indian nationals, about the State Department advisory last week, and is discouraging travel there, said Intel spokesman Chuck Mulloy.
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