| Since 1991, India has undergone a sea change in its outlook towards foreign investment and global collaboration and now you add to that, the phenomenon called Internet and you have an explosive combination. India is considered to be the ultimate destination for outsourcing for variety of reasons, the most important being that Firstly, India provides services at reduced costs with standard quality assurance, latest technical skill set, and services which are reliable and innovative. Secondly, India has largest number of SEI-CMM level 5 companies in the world and will soon have highest number of ISO 9000 software companies in the world and finally the offshore outsourcing model being practiced by Indian companies is world class and widely accepted around the globe. |
Apart from the above, India holds great investment potential due to following reasons: - India is a talent rich country.
- India exports software to 95 countries in the world.
- India enjoys confidence of global corporations.
- 82% of the US companies ranked India as their first choice for software outsourcing.
- Bill Clinton appreciates India´s brain power. He says Indian-Americans run more than 750 companies in America´s Silicon Valley.
- The companies in India work 24*7. This is one of the best advantages that companies have when they outsource to India. For them, the work should never stop. When people in America sleep, Indians work and vice-versa. Due to this model, organizations can increase the standards of customer support and the queries of valued customers would never go unanswered.
- Government is attracting lot of FDI (Foreign Direct Investment) into the country. Investing in India has become much easier than before. Before India adopted the policy of liberalization, it was very difficult to allow FDI. A special preference is given to the IT sector. The infrastructure is also improving in a great way. A separate Ministry of Information Technology was set up to expedite swift approval and implementation of IT projects and to streamline the regulatory process. The motive of the government is to make technology reach the grass root level. FDI inflows to India surpassed the $5 billion.
- Software technology parks of India are of world class infrastructure and offer various concessions to encourage foreign investment and promote software development in India, for example 100% Foreign equity is permitted and approved under the Automatic Route delegate powers to The Directors STPI, tax holiday until 2010, etc.
- Transnational companies have recognized India´s capability and potential as an outsourcing hub for e-business solutions.
- Sun wants to help build 100 dotcom companies in India. In around three to four years, we want to help create 100 dotcom companies in India each with a market cap of around $10 billion says Sun´s VP and MD (Asia South). This is perhaps the biggest investment of Sun Microsystems in this country. Adding to the list, Cisco, a networking giant said it would invest $150 million in India over the next two years. Cisco has already invested $75 million in India since January 1996. Both Sun and Cisco will also increase their workforce at their development centers.
- US based auto maker giant Ford Motor Company (FMC) is working in a big way in making India, the IT hub for its global operations. Ford is to set up a software development center in India for its e-business solutions. FMC will invest $3 to $5 million over the next 6-18 months into the IT venture. This can go up to $30-$50 million per year. We have already started getting IT work from other manufacturing bases to India”, said John Larson, the company´s director (IT) Asia Pacific and South Africa. Ford is also planning to set up an India chapter of its Web initiative, Covisint. Covisint is a joint venture between three auto giants namely Ford, General Motors and Daimler Chrysler for common purchases on the Net. Ford is also planning to set up call centers to do its back office work in India on the lines of GE.
- Another IT major, Oracle, also has huge plans for India. Oracle will set up an off site consulting center for providing virtual consulting resource for Oracle worldwide. Oracle also has plans to set up an extension of its e-business studio at Hyderabad, which will provide virtual consulting capability and knowledge to all Oracle clients worldwide. Oracle already has global software development centers in Bangalore and Hyderabad.
- Leading U.S. multinational General Electric (GE) will invest approximately $130 million over the period of three years in John F. Welch Technology Center in Bangalore, the largest R&D center of its kind in GE family outside the US. This center was built in a record time of 10 months and was inaugurated by John F. Welch Jr., Chairman and Chief Executive. It incorporates latest technology and e-engineering tools that facilitate real time global interactions with GE´s customers, suppliers, businesses and technology centers, including its U.S. lab in Schenectady, New York.
Therefore, these are some of the above mentioned benefits of outsourcing to India. Outsourcing to India will continue to stay as British Minister of State for Trade, Investment, and Foreign Affairs, Mike O´Brian told in an interview that Britain would not take any protectionist measure for its domestic industry. He said that it is a free market economy and India is not the only one, which will benefit from outsourcing. Britain is equally benefiting from Outsourcing to India. He added that outsourcing to India is not responsible for job loss in Britain in fact, employment rate is all time high in UK. |
