Nothing to panic about if undersea cables disrupted in gulf war, alternate routes available: HCL Software's Shailendra Gupta

Undersea cable disruption risks in West Asia could affect global internet connectivity, but HCL Software’s Shailendra Kumar Gupta said alternate routing exists and there is “nothing to panic about.” He argued that India’s impact would be limited if data and applications remain domestic, while emphasizing proactive cybersecurity, legacy network protection, and security-by-design amid rising AI and quantum risks. The article is mainly a risk-awareness piece rather than a direct market catalyst.

Analysis

The market should treat this less as an acute outage trade and more as a strategic sovereignty signal. The first-order risk to India is not a wholesale internet failure, but a latency, redundancy, and routing-cost shock that disproportionately hits sectors with real-time dependence: global IT services delivery, fintech rails, cloud-dependent SaaS, and any workload still hair-pinned through non-domestic networks. That creates a subtle relative winner set: domestic data-center operators, local cloud, network security vendors, and infrastructure players positioned around India-based storage and compute.

The second-order effect is procurement acceleration. Public sector and regulated enterprises rarely re-architect until an external shock makes resilience budgets politically defensible; if this narrative persists, expect more spending on sovereign cloud, zero-trust, backup routing, and OT segmentation over the next 2-6 quarters. The biggest beneficiaries are not the largest global software platforms, but firms that can sell compliance, on-prem control, and hybrid deployment with short implementation cycles.

Consensus is likely underestimating how little cable disruption is needed to change buyer behavior. Even a brief or non-destructive incident can reprice enterprise risk models if it exposes single points of failure, which means the real catalyst is not a successful attack but the market's perception that one is plausible. Conversely, if geopolitical tensions ease or telecom operators demonstrate robust rerouting with negligible service degradation, the trade fades quickly because the argument for urgency weakens.

From a contrarian standpoint, this is not automatically bearish for the digital economy; it can be bullish for domestic digitization and localized infrastructure capex. The nuance is that multinational vendors with offshore delivery or foreign-hosted control planes could see procurement scrutiny, while Indian firms with sovereign and hybrid stacks gain share. The risk/reward is best expressed through relative value rather than outright sector shorts.

Key Decisions for Investors

• Long data-center and India digital-infrastructure exposure for 3-6 months: buy names with domestic capacity and sovereign-cloud linkage; risk/reward is attractive because even a modest enterprise capex shift can lift utilization and pricing power faster than consensus models assume.
• Long cybersecurity infrastructure vs. broad IT services: prefer pure-play security beneficiaries over labor-arbitrage exporters, using a 2-4 quarter horizon; the asymmetry is that spending is sticky once mandated, while service-disruption fears are often transitory.
• Pair trade: long India-focused network/security beneficiaries, short offshore-heavy global delivery names that rely on external routing and foreign control planes; enter on any volatility spike, with downside protected by the fact that the thesis is relative, not directional on Indian tech spend.
• Buy medium-dated calls on domestic cloud/data-center proxies with catalyst windows over the next 6-12 months; use defined-risk options because the trade needs a policy/procurement catalyst rather than an immediate outage.
• Avoid outright shorting broad India IT exporters unless cable-risk escalates into proven service degradation; if the event remains hypothetical, the market will likely re-rate resilience rather than punish the sector indiscriminately.