LATAM risk looms for Indian IT firms
US military action raises concern over stability in a region critical to India’s nearshore delivery model
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Bengaluru: Any uncertainty arising in South America following the recent US military strike on Venezuela could have a negative spillover effect on the Indian IT industry, which increasingly relies on Latin America as a nearshore delivery hub.
Industry experts point out that Latin America (LATAM) has emerged as a key market for Indian IT services firms, both as a growing market and as part of their geographical diversification strategy.
“While Venezuela itself is not used as a nearshore destination, countries such as Mexico, Colombia, Chile, Brazil and Argentina host development centres of several major Indian IT services companies. LATAM is also a fast growing market for Indian service providers. Any political instability in the region is therefore not good news for the tech industry,” said a senior executive at a mid-tier IT firm, speaking to BizzBuzz.
However, he clarified that Indian IT companies have limited exposure to Venezuela and not heavily invested in the South American nation. “There will be no direction impact on operations,” he added.
On Friday night, the US military struck multiple locations in Venezuela and arrested the country’s president and his wife, triggering global reactions. Several leaders across South America have strongly condemned the move. LATAM’s importance as a nearshore destination has grown significantly, particularly after restrictive immigration and visa norms were introduced by the Trump administration. Countries such as Mexico, Colombia offer time-zone alignment with North America, enabling Indian IT firm to deploy local talent to serve US clients more efficiently. Over the years, the region gained importance due to cost advantage and availability of tech talent.
“The importance of nearshore centres has increased after Trump imposed restrictions on
H1B visa applications,” the official said.
Since returning to power, US President Donald Trump has introduced a $100,000 entry fee for new H-1B visa applicants. Further, the US government replaced the lottery-based selection system to a wage and experienced based framework, set to take effect from February this year.
These policy changes have further turned LATAM region an attractive destination for serving clients in the US. Any instability in the region could further an already fragile global recovery, which continues to face headwinds from Trump-era tarrifs.
