As the Pakistan-India standoff escalates, IT managers are keeping watchful eyes on offshore outsourcing partners--even though IT workers in India seem relatively unconcerned about tension in the region.

"It's very surreal," Wipro Ltd. CEO Vivek Paul says. "Our employees in India watch CNN and see U.S. and British civilians leaving, but they aren't feeling under threat." That may be because most of India's estimated 445,000 IT workers are in southern cities--Bangalore, Chennai, Hyderabad, and Pune--some 1,500 miles from the border with Pakistan (see story, "Low-Cost Offshore Outsourcing Comes With Risks").

Still, the word from top Indian outsourcing firms Infosys, Tata, and Wipro is that U.S. clients are concerned about business continuity.

"They aren't worried that systems will be destroyed, because the systems don't reside in India," says Giga Information Group analyst Stephanie Moore, "but they're worried that resources that develop or maintain systems could go down because communications are cut off."

For now, most IT executives, including Jarnail Lail, VP of business systems for W.W. Grainger Inc., are simply watching the situation. "I have family there, and I also want to make sure we have proper coverage in case there are any problems," he says. Grainger outsources programming and production support to Covansys Corp., a U.S. outsourcer with several offices in India. Data and systems reside in the United States. A 50-50 split of personnel between the United States and India means someone can handle any IT issues that arise if communications go down, Lail says.

Less than 5% of Sears, Roebuck & Co.'s IT staff is offshore, so the company says it isn't concerned about IT workflow interruptions. After Sept. 11, Sears requested contingency plans from its five offshore partners. Such plans typically include moving staff to safer locales, shifting communications to other regions, and ensuring that redundant systems are in place.

If the situation worsens, Sears may move some work elsewhere, but it has no intentions of abandoning its Indian relationships, says Karen Schram, a member of Sears' IT sourcing strategy team. "There are up-and-coming strong pockets of IT resources, but they're several years behind India in terms of a mature offshoring model."