Siemens Dialog
20.06.2024, 05:06 Uhr

India: Beyond the Zenith?

  • 06.06.2006
  • International

Of a global outsourcing volume of about 300 billion Dollar, experts assume, 22 are currently flowing to India. Indian IT-companies keep hiring thousands of qualified employees. But experts and local managers are warn that the boom might be over soon.

„During the next ten years we will still be able to benefit from our cost advantages. But competition is getting more intense“, Tata-CEO Subramanian Ramadorai told the German Financial Times in an interview last week. Indian companies were still able to find and hire affordable and talented staff, but while India’s cost advantages were falling slowly, new competitors like China and Vietnam were already waiting in the wings as „new low-wage countries in the IT-industry.“

Therefore, Indian IT-companies have already started to direct their attention towards these countries and towards emerging IT-markets in Eastern Europe and South America. Analysts have been warning for years that the outsourcing rush to India could go back due to decreasing numbers of well trained university graduates, annual wage increases of 15 percent and bottle necks regarding technological infrastructure; for example, Tata’s most important competitor Infosys has announced an 15 percent increase in wages in April. Ramadorai is fully aware that the cometlike rise of his country might be over in the long run, nevertheless he is convinced that annual growth rates of 15 to 20 percent will be realistic in the years to come. His company is still hiring 60 new employees - per day! In order to prepare themselves for hard times to come, Indian IT-giants like Tata have begun to expand abroad, especially in the countries of their own customers and are already challenging companies like IBM and EDS which have had to face single-digit growth rates for years.