Indian IT Firms Increase Outsourcing TO the U.S.
Indian IT and outsourcing companies earn revenues in dollars but pay most of their costs in rupees. Profit margins for these companies have been squeezed lately because: a) wages have been rising by 10-15% in India because of the high demand for workers and b) the dollar is trading at a 9-year low vs. the India rupee and has fallen by almost 15% in the last year.
Solution? Outsource to the U.S.
MUMBAI--Tata Consultancy Services plans to open two computer services centres in the U.S. in one of the biggest expansions by an Indian information technology outsourcing company in a developed market.
India’s largest computer services company, part of Tata Industries, said the first centre of 500-1000 people would open in Cincinnati, Ohio, by the end of this year or early next year, with the second to follow in late 2008 or early 2009 at an undisclosed location.
Bottom Line: Globalization works both ways.