Tuesday, June 19, 2007

India Outsourcing Thousands of Jobs, TO the U.S.

The U.S. dollar has depreciated by more than 17% against the Indian rupee over the last 5 years, and by more than 10% over the last year (see chart above, click to enlarge). Result: Outsourcing of jobs and production has increased, but now FROM India TO the US by Indian IT companies like Tata, Wipro (NYSE:WIT) and Infosys (NASD:INFY)! For example, Tata plans to hire 2,000 Americans within three years for jobs IN the U.S.

From India's
The Economic Times: "Indian companies, which are becoming major players in the international arena, are hiring aggressively in the United States, reversing the earlier trend when they always transferred Indians to work in America on temporary visas.

Also, as the Indian rupee has risen more than 10% against the dollar this year, hiring Americans has gotten cheaper. At the same time, fierce competition for tech talent in India is pushing salaries there up by 12% to 15% per year, although they remain less than a third of those in the US."

In this related
Economic Times article, India is now the #1 job creator on the planet: "India generated 11.3 million net new jobs per year on an average during this period, higher than 7 million in China, 2.7 million in Brazil and 0.7 million in Russia. In contrast, the average was 3.7 million in the OECD area as a whole."

Bottom Line: As India and China's economies grow and prosper, and in the process create jobs, income, and wealth internally, they also become wealthier consumers of goods and services produced in the U.S. (American cars, software, education, travel, etc.) and they help to create jobs in the U.S.

Do we really need the World Bank and IMF when we have the forces of globalization, free markets and international trade (and Wal-Mart) lifting millions of people out of poverty in India and China, creating millions of jobs not just there, but in the US as well!?

(HT: Sanil Kori)


At 6/20/2007 2:21 PM, Anonymous Anonymous said...

Misleading. If you follow the jobs that these company are hiring for in the US, many of these take advantage of the H1-B Visa to import talent from their Home-Shore and also preferentially hire Eastern workers and the headline seems much less rosy. Grrr. Look at the artcle from InformationWeek: The Top 200 H-1B Employers Of 2006

So let's do the math: (Tata hires 2,000 Americans within three years)-
(Tata gets ~3000 visas for each year)x3=
Over a three year period, around 7000 American workers displaced.

At 6/22/2007 7:44 AM, Blogger Vik Rajagopalan said...

It was quite an interesting article and for once someone spoke in the India's defense!!

As the comment above, it is very misconceived notion that IT workers alone dispel the H1B Cap. News is that there are other vagaries of work which take H1B into account to employ an Immigrant.

Also, going by the percent of money that is saved in the process for the MNC's, I think it would only make a sane move to have an office of some kind in the Asian country which for the moment seem to be running away without even taking a breath!

BTW interesting blog and I would also invite you to drop by my blog whenever you get a chance.


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