The information technology industry has been the hallmark of the Indian growth story since the 1980s. The Indian IT sector has relied heavily on non-home markets for demand and resources and built deep global ties using co-location with clients, enabled by international travel and temporary on-site migration, acting as a key mechanism in developing “cognitive proximity.” However, the COVID-19 pandemic is expected to make international travel and migration more restrictive and costlier, maybe for a long time. The paradigm shift creates significant barriers for IT firms to be able to maintain cognitive proximity with its clients and could adversely impact their global competitiveness.
