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30 Minute Interview
Indian software giants go global
It has been observed that most Indian software giants are
expanding their overseas operations. Ameet Nivsarkar, VP, NASSCOM discussed
this trend with Faiz Askari.
Ameet Nivsarkar |
NASSCOM’s take on Indian companies expanding overseas
The trend of Indian companies setting up facilities outside
India either through acquisitions or otherwise has gained prominence in the
last couple of years. We feel that it is a positive step for the industry as
this model is one of de-risking. Indian firms today are keen to increase their
global footprint and the trend is a strong indicator of Indian firms going global.
It also gives firms better access to clients which helps in improving synergies,
direct client exchange etc and it takes less time to expand and add product
or service lines in case of acquisitions, as well as helps them tap fresh markets
and the talent in these markets.
It is a two way process; if on one hand Indian companies are setting up centers
in other countries they are at the same time creating employment opportunities
and contributing to the exchequer of those countries.
Likely impact thereof
India is by far the leader when it comes to skilled talent in the outsourcing
space and at present the supply of IT professionals exceeds demand. The trend
of Indian companies setting up centers abroad does not undermine the skill and
availability of the required talent within the country. India has the largest
pool of educated, professionally qualified talent with approximately 3.1 million
graduates added to the workforce annually and it accounts for 60 to 70% of the
low cost offshore workforce of leading global MNC providers. These facts corroborate
that the kind of work that India is receiving is because it offers some of the
best talent in the world and there is no reason for concern that the trend [of
Indian companies expanding overseas] would have any negative impact on India’s
talent pool.
Is it expensive to stay in India?
It is true that in the current scenario the cost of setting up a facility in
India has gone up and it has been largely due to recent phenomena such as the
Rupee appreciating, wages rising etc. However, Indian IT-BPO exports account
for 58% of the worldwide offshore IT-BPO which was estimated to be $40 to 42
billion in FY 2006 and it still offers the best business value proposition in
comparison to other off-shoring countries. India has the scale and talent which
is superior to most countries and the cost of talent remains lower than that
in other countries. Having said that, the Indian IT industry is going through
a challenging phase right now due to changing market dynamics and there is greater
need of government support in the form of sops, extension of the STPI scheme
etc. to battle these new market forces and maintain the country’s leadership
position in the global outsourcing space.
The talent run
At the current pace of talent addition, India has more than the presently required
number of IT professionals. However, to maintain its share on the global offshore
IT and BPO industry, suitability of the available talent will need to be honed.
Currently, about 25% of engineering graduates in India have the skills to be
employed in IT jobs without prior training, and with various initiatives underway
by both the industry and other stakeholders (like the government) this will
keep increasing by a few percentage points year on year.
faiz.askari@expressindia.com
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