Passport

Indian outsourcers keep on outsourcing

STR/AFP/Getty Images Outsourcing is increasingly becoming a two-way street. Late last year, Passport noted that some Indian companies have begun setting up offshore facilities in places like Malaysia. It’s a trend that’s been building for several years now. In 2005, Infosys launched a massive expansion in China; in 2006 Satyam Computer Services did the same, ...

STR/AFP/Getty Images

Outsourcing is increasingly becoming a two-way street.

Late last year, Passport noted that some Indian companies have begun setting up offshore facilities in places like Malaysia. It’s a trend that’s been building for several years now. In 2005, Infosys launched a massive expansion in China; in 2006 Satyam Computer Services did the same, and looked toward Malaysia as well. This year, a number of Indian companies have turned to a United States-based firm, Hanna Global Solutions, for administrative services for Indian employees.

Just two weeks ago, Tata Consultancy Services (TCS), India’s largest outsourcing company and software service provider, set up a global delivery center in Guadalajara, Mexico. Over the next five years, TCS plans to hire as many as 5,000 staff there, with the first 500 jobs being outsourced from India this financial year. Around the same time, Zensar, another IT and business outsourcing service provider headquartered in Pune, announced its plans to open an outsourcing center in Gdansk, Poland. Zensar plans to invest an initial $2 million in the project, and Polish engineers trained in Pune will service European clients. Zensar aims to create more than 350 new jobs in the first 30 months of its operations in Poland. 

Why the shift? One reason is that these firms still benefit from being close to the markets to which they cater, utilizing local knowledge and working in the same time zones as their clients. But more important, perhaps, is the fact that India’s rising wages for skilled labor and the increasing value of the rupee against the dollar have hurt India’s competitiveness as an offshore service provider. Naturally, these two trends have raised the relative appeal of other locations—for international as well as Indian firms. The result: India, a prime outsourcing location has also become an outsourcer.

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