Tuesday, September 11, 2007

Indian outsourcing in IT faces challenge as market shifts from US to China - Wipro to open more centers in China


China may not be as gullible as America. It will not be easy for Indian IT companies to fool the Chinese as they did to the American taking advantage of American ‘excess of chiefs and lack of Indians.’

America was an easy market. Americans prefer to enjoy life and get tough work done by the immigrants (legal, H1B and illegal aliens). When it came to tough programming and technical work, the American corporations looked towards the India to get cheap labor of the ‘Indians’. But now American economy is headed for a deep recession if not a 1929-33 style devastating depression. The Indian IT companies cannot get any more money from the Americans and therefore they are looking towards China and Middle East.

Chinese market is different. In America 75% of the country’s wealth is held by people above the age of 50. There is a need for young ‘Indians” do the tough work that needs exercise of brain. China has no lack of ‘Indians.’ Their goal is to learn from Indian IT companies and get rid of these South Asian companies as soon as possible.

Wipro is looking to open additional development centers in China as it ramps up operations to cater to the growing customer requirements, a senior official said.

"We are looking at setting up more centers in China. In the next one year or so, we definitely will have more centers in China," Suresh Senapaty, chief financial officer of the Bangalore-based IT major said.

The New York Stock Exchange-listed Company already has three centers in China. He said Wipro has not seen any impact on its outsourcing business from the US subprime mortgage crisis. Experts say, not yet is true, but the long-term effect will be devastating for the Indian economy.