India's Information Technology sector is a world leader, and a driving force for the economy. But the industry, which greatly depends on business from the US, is suffering severely in the economic slowdown.

The IT business in India has performed well in recent years, growing by 30% last year. But times are getting tougher, and the estimated growth in the current year is down to a little more than 20% and employees are feeling the pinch.

Times are also getting harder in the service sector.

“Well, initially, of course, it was a big attraction because you didn't have to have any work experience and probably you could get a good pay package and good incentives and so people thought you could make a career earlier but with the economy as it is right now they are cutting salaries,” said Monisha Chopra, a former call centre employee.

The companies are now benching employees, meaning they are kept sitting around in anticipation of work. But a time when everyone seems adversely affected by the economic slowdown, the Indian business outsourcing sector may actually benefit in the medium term.

More economic regulation means more administration, and India's lower costs make it an attractive market for US and European companies to outsource their work to.

“This process of inducting more money creating more business will mean more competition and more regulation. Now, both regulation and competition mean more business as far as the Indian IT industry is concerned,” said Kiran Karnik, former president of NASSCOM global IT trade body.

Management and workers are hoping for better times ahead in this once thriving industry, but they're likely to have to adapt to survive.