Bangalore outsourcers may be affected by dispute

Operations of IT services companies in Bangalore face potential disruptions as the city protests a tribunal decision on the sharing of river waters between two states.

The order covers Karnataka, of which Bangalore is the capital, and the neighboring Tamil Nadu state. Besides Indian outsourcers like Infosys and Wipro, a number of multinational companies, including Dell, IBM, and Accenture have global services operations in Bangalore.

The tribunal, set up to arbitrate the dispute, delivered a verdict on Monday that has angered the people of Karnataka, who want a larger share of the waters of the Cauvery river. Disputes over sharing the waters of the Cauvery have in the past led to violence in Karnataka.

A verdict over sharing of Cauvery water by another panel, in 1991, sparked off anti-Tamil violence in Karnataka, which left about 18 people dead. Karnataka has a significant number of settlers from Tamil Nadu.

A few Bangalore IT companies closed operations early on Monday and asked their staff to work from home as they were worried that news of the order would trigger off violence in the city. Most others however ran their operations normally.

"It is business as usual as extra police have been deployed, and everything seems under control," said a spokeswoman for Infosys of Bangalore. Infosys, which is India’s second largest outsourcer, is in touch with the government and is evaluating the situation round-the-clock, she added.

Accenture, which also has a large operation in Bangalore, is working normally, said a spokesman for the company. The company has staff working on both day and night shifts.

So far, there have been reports of only sporadic protests in Bangalore and surrounding districts. The government of Karnataka deployed about 18,000 police in the city ahead of the tribunal's verdict.

If violence erupts or if there are calls for strikes, IT companies may have to temporarily scale down their Bangalore operations as it will become difficult for staff to get to work. Most IT companies like Infosys and Wipro have business continuity plans in place to move work to their facilities in other locations in India.