Growing pains dim India's outsourcing edge
By Sumeet Chatterjee
BANGALORE (Reuters) - Indian outsourcing companies are shifting some of their operations to China, the Philippines, Vietnam and Kenya in a bid to stay competitive as higher wages, expensive property prices and a rising rupee eat into profits.
Back-office services companies thrive on doing jobs such as taking customer calls, payroll management and accounting at a fraction of the cost for big multinational firms or governments.
But costs in India are climbing on the back of a robust economy that has lured skilled workers to other sectors, forcing companies to look elsewhere to stay in business.
"If I was only in India, probably I would have been worried to death," said Partha Sarkar, chief executive of HTMT Global Solutions Ltd.
The Bangalore-based back-office services provider used to generate all its revenue from India by providing services to its clients in the United States. But India now accounts for little over half the total, and rapid expansion in the Philippines and Mauritius has helped it offset the impact of a stronger rupee. It plans to enter China and Vietnam soon.
The company sees its 2008 revenue jumping to $150 million from $97 million in the last fiscal year.
"Three years back, I was completely exposed to rupee-dollar," Sarkar said. "Now it doesn't worry me. I have diversified my currency and country risk."
In July, Infosys Technologies, India's second-largest software services exporter, said it would buy three of Royal Philips Electronics' back-office services units in Thailand, Poland and India to expand market presence. Continued...
Dubai Debt Fears
Banks outside the Gulf played down their exposure to Dubai debt, after fears the emirate could default and even derail world economic recovery prompted a sell-off in global markets. Full Article | Slideshow
India Investment Summit 2009
Top executives and bankers discuss their own plans and the broader opportunities and challenges for India. Full Coverage






India
US
UK







