BPO Backlash

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Offshore Opt-Out

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Infosys to Create Consulting Jobs in U.S.

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Came via email:

<b>This report once again clearly establishes the power of the US business lobby to thwart any measures which go against their vital interests.

Lesson: India needs to cultivate US corporates even more aggressively. </b>

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->UNDERSTANDING OUTSOURCING

States' Efforts to Curb Outsourcing Stymied

Business Groups Take the Lead in Weakening
Attempts to Limit Work From Moving Abroad

By MICHAEL SCHROEDER
Staff Reporter of THE WALL STREET JOURNAL

April 16, 2004; Page A4

When India's largest software company won a $15
million contract to upgrade the processing of
Indiana's unemployment claims, public outrage prompted
the state Senate to vote to ban future outsourcing of
state contracts to other countries.

But then the business community swung into action to
derail the bill. The result: A watered-down version
was introduced in the state's lower house and
eventually died.

Indiana's experience is typical. Dozens of U.S. state
legislatures, responding to the furor over
white-collar jobs being sent overseas, have been
considering antioutsourcing bills. But so far, the
business lobby has killed or weakened every proposal
to prohibit government work from being sent abroad.

Spearheading the attack is the Coalition for Economic
Growth and American Jobs, formed late last year by the
U.S. Chamber of Commerce, the Business Roundtable, the
American Bankers Association and other powerful
business groups.

The coalition's success shows how hard it is for state
politicians to defeat a well-funded and well-organized
business lobby, even when populist anger is high.
Among its tactics: enlisting big employers to say they
would be hurt by the restrictions; warning that
taxpayers' costs would go up if outsourcing were
curbed, and trying to run out the clocks on the
legislative sessions.

The group has used similar arguments to bottle up a
half-dozen national proposals in Congress. Still,
business lobbyists worry the issue will heat up as the
election nears.

U.S. Chamber of Commerce President Thomas Donohue said
this week he's concerned about an "election-year
effort from people of both parties" to load up a
corporate-tax overhaul measure with amendments aimed
at curbing outsourcing abroad, and called on President
Bush's administration to more aggressively defend the
benefits of the global economy. Massachusetts Sen.
John Kerry, the likely Democratic presidential
nominee, is pushing a bill to require workers at
telephone call centers to disclose their physical
location at the beginning of each call.

On the state level, the foot soldiers of the corporate
campaign on outsourcing are local businessmen. At a
recent conference at the Boca Raton Resort & Club,
Bruce Josten, a coalition leader and executive vice
president of the U.S. Chamber of Commerce, outlined
the "blocking and tackling" techniques he says should
be used to fight antioutsourcing plans. For example,
business leaders should warn lawmakers that the
offending legislation would hurt foreign investment
and violate free-trade agreements, he told officials
from chambers of commerce from across the country.

The strategy is working: Of the 35 state legislatures
where tough antioutsourcing proposals were introduced
in recent months, six have adjourned without acting on
them. And the rest aren't likely to produce anything
better than watered-down versions of the bans sought
by organized-labor lobbyists.

"It's incredible the stranglehold the corporate
interests have on this issue," said Marcus Courtney,
president of the Washington Alliance of Technology
Workers, an affiliate of the Communications Workers of
America union based in Seattle. "It wouldn't surprise
me if we don't see anything passed this year and we
have to ramp up again next year."

The fight in state capitals has been under way since
last year, sparked by publicity that some contractors
were using call centers in India to answer questions
on health and welfare programs.

A look at Indiana shows why none of the initiatives
has made it into state law. News that the giant Indian
software company, Tata Consultancy Services, had won
the state contract caused a public outcry, prompting
the Democratic governor, Joseph Kernan, to cancel the
contract. (It had been awarded by his predecessor,
Frank O'Bannon, who died in office last fall.) A
spokeswoman for Gov. Kernan said the contract, which
is being rebid, was withdrawn because the bidding
process didn't allow Indiana companies a fair chance
to win the work.

Meanwhile, the state legislature jumped in. State Sen.
Jeff Drozda, a conservative Republican, proposed
requiring that all state work be performed in the U.S.
The measure, which was supported by the state AFL-CIO,
passed the Senate in February by a vote of 39-10.

Caught off guard, business lobbyists rushed to oppose
the bill, enlisting the help of American Express Co.,
Anthem Blue Cross and Blue Shield, Electronic Data
Systems Corp., Lincoln Financial Group, as well as a
newly created credit-card company coalition. In
one-on-one meetings with lawmakers, some of the
companies fretted, among other things, that the
measure could disrupt work on existing state contracts
that already had been partially outsourced.

In a nod to their concerns, the House Democratic Floor
Leader, Russell Stilwell, in February offered a
watered-down version of the Senate bill. It provided
only a "preference" for Indiana companies for state
work. Even so, Democrats were hesitant to force the
governor to pick sides between business and labor on a
hot-button issue. The House left town in March without
voting on the bill.

Maryland lawmakers faced similar dilemmas. Democratic
State Delegate Pauline Menes introduced a bill in
January to prohibit work on state contracts from being
performed "by a contractor or subcontractor from a
site that is located outside the U.S."

In response, a lobbyist for Nationwide Mutual
Insurance Co. of Columbus, Ohio, complained that the
bill would interfere with its work on a contract
involving the state's employee-pension program,
because an Indian subcontractor had developed the
software. Separately, the University of Maryland
worried that the bill would affect its overseas-study
programs because they employ foreign nationals. It
later got an exemption from the bill.

Lawmakers ultimately hammered out a compromise to
allow the state procurement office, in awarding a
contract, to consider where the work would be
performed. "We struggled to find a balance," said
Maryland Delegate Dan Morhaim, a Democrat who chairs
the subcommittee handling the bill.

After passing the House of Delegates, the weakened
bill was approved by the Senate in the final minutes
of Maryland's session this week. Susan Levitan, a
lobbyist for the Maryland branch of the AFL-CIO, said
the bill is "a first step." The union plans to push
strong outsourcing limits next year.

For critics of outsourcing, there is one bright spot:
Four governors have attacked the practice
administratively, though only one has banned it. In
Arizona, Democrat Janet Napolitano decreed that state
work must be done in the U.S. In Missouri, Democrat
Bob Holden ordered that no state work could be sent
abroad absent compelling reasons. Similarly, in
Michigan, Democrat Jennifer Granholm ordered the state
procurement office to give preference to U.S. and
in-state bidders for state work. In Minnesota,
Republican Tim Pawlenty issued new requirements that
companies disclose any state work being done outside
the U.S.

By contrast, Republican Gov. Jeb Bush of Florida
recently signed an order endorsing outsourcing as a
way to save taxpayer money. But, with an eye to the
political ramifications, he also directed a state
agency to study the effect of outsourcing the work.


Write to Michael Schroeder at mike.schroeder@wsj.com
<!--QuoteEnd--><!--QuoteEEnd-->

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http://in.rediff.com/money/2004/apr/28bpo6.htm

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->And now, religion being outsourced!

April 28, 2004 20:09 IST


Britain's biggest industrial union expressed alarm on Wednesday at the latest trend in outsourcing to South Asia: religion.

"Religious services and prayers for the dead are being offshored from the United Kingdom to India because of a lack of priests," Amicus, whose one-million-plus membership includes several thousand clergymen, said in a statement.

Amicus cited press reports which revealed how more and more prayers were being said in Kerala because they had become too expensive in the West.

"This shows that no aspect of life in the West is sacred," said Amicus' national secretary, David Fleming.

"We have identified 25 different skilled jobs (in Britain) that have been offshored -- but saying mass and delivering religious services is a real shock."

Amicus spokesman Lee Whitehall told AFP that the union -- which represents many financial services workers in Britain who risk losing their jobs to offshore call centres -- was not against offshore religion as such.

But he said it highlighted the need for organised labour, business and government to map out a strategy to minimise the negative impact of offshore outsourcing on both British and Indian workers.

-- AFP
<!--QuoteEnd--><!--QuoteEEnd-->

[Sunder]

<!--QuoteBegin-rajesh_g+Apr 29 2004, 02:14 AM-->QUOTE(rajesh_g @ Apr 29 2004, 02:14 AM)<!--QuoteEBegin--> <!--emo&:omg--><img src='style_emoticons/<#EMO_DIR#>/omg.gif' border='0' style='vertical-align:middle' alt='omg.gif' /><!--endemo-->

http://in.rediff.com/money/2004/apr/28bpo6.htm

And now, religion being outsourced!

<!--QuoteEnd--><!--QuoteEEnd-->
The new outsourcing should be addressed under 'missionary' and conversion activities. Naturally, once 'religion' and prayers are outsourced, there will be new recruits locally, seeing that the 'praying people' (read preyed people) are making easy money from the prayer business. If it takes off as an industry, then we will soon have new converts locally too.

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<b>Current BPO Wave and Its Timing</b>
...
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->What Can India Do to Alleviate the Situation? 
BPO outsourcing drive to India cannot be slowed. The latter will impact on the business profitability. I am assuming that by the end of this year, American economy will start churning out jobs; hence short-term criticism of outsourcing will be over. From India’s point of view, this is a great opportunity. But this opportunity is full of obstacles. These obstacles are to be overcome by undertaking US friendly acts, like: 

A.     Trade, which currently favors India, should be balanced. India should begin purchases of American goods and services much more keenly. 

B.     Indian companies beneficiaries of the BPO wave should begin American operation, employing American public. 

C.     <b>As a gesture of goodwill, India could make a contribution to the American effort in Iraq, after the UN begins the democratization of the country. </b>

Who Could Spoil the Party? 
With careful diplomacy, the West has turned around and become a friend of India. This took 50 years, but it has happened. If you believe the President of USA’s word then India is a strategic partner of USA. A few hiccups from time to time will test this partnership, but overall pace has been set such that India and US both need each other. This partnership at the moment has not resulted in a formal document of an alliance but the writing is on the wall i.e. India and US will depend upon each other for security in Indian Ocean Littoral states and act to counter any Chinese influence in the region.  

But any relationship has to go through the test of time. Some situations, which could spoil this party, are: 

* US dramatically restrict outsourcing by law.

* India does not act on US request to further tighten high tech exports in nuclear and missile technology.

* Indian costs rise too fast and become prohibitive for outsourcing.

*  <b>Dramatic change in the make up of the government after April 2004 Elections in India</b>.

  * Under any political compulsion, US begin pulling back outsourced jobs.

  *  <b>No Indo-Pak settlement is reached; hence threat of war is constant on the sub-continent. </b>

All these will have a negative impact on the American psyche, which at the moment is set against outsourcing. 
<!--QuoteEnd--><!--QuoteEEnd-->

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Conclusion 
There is only one-way i.e. India has to tie up more with US to avoid outsourcing backlash any further. The current backlash is a direct result of sluggish economic growth and election year politics. Outsourcing would not be an issue as soon as job growth improves and retrained personnel find better and more productive work. India has to prevent anybody spoiling this party with skill and political smartness. Other areas of outsourcing are waiting to be explored. Soon Indian and US economies will be intermingled to such an extent that each is dependent on the other<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

This analysis of BPO backslash in SAAG is done with very non-professional mind.Totally useless.

I don't agree with this sentimental fool who wrote this SAAG article.Maybe somebody paid him.SAAG seems tobe becoming infected with State department virus or I should say Leftist articles r also increasing on this SAAG forum.

Also,this is only rubbish idea of Indian Elite Businessmens that India should SURRENDER her STRATEGIC independance for SHORT-TERM PROFIT of this BPO rubbish.

Lets concentrate on domestic market and strong Rupee.This BPO is temporary.And taking it as such huge problem is FOOLISH and non-professional sentimental attitude.

damn!...this SAAG is becoming foolish now.God forbid India if delhi bureacrates think on similar lines.

In fact,British rulers were smarter than this SAAG writer.He is a dumbo.

Why to connect a small economic activity like BPO with STRATEGIC decisions and stands of a big country like India?....are we fool?.....

If this is way,we are going to preceed then soon there will be 20 more BPO waves.And Indian Ocean will be taken over by USA in return as favour to them.

BPO is not any favour.Its helping USA more than India.

What a third-class article from websites like SAAG.totally unexpected.
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Vishal,
I agree with you.
India is not for sale PERIOD.

[Guest]

SAAG has had great writers around like Shri Raman or Arindam or Parthasarthy etc. Hari Sud’s written some good articles before and have also followed his post in different forums. Not sure as to what’s got him lately, in a previous article he had written about <i> India has to thank America for its benevolence for making it as its back office.</i>
I just don’t get it – is anyone doing a favor on India by making it it’s back office?
It’s plain and simple business factors driving such decisions rather than emotions. Even in this latest article at SAAG, methinks he’s on a bit shaky ground. Some of the indicators to raise BPO business in India listed, tantamount to GUBOing. All indicators listed from a US-India centric position. In order for BPO to grow, it would bode well for India to hedge it’s bet by “BPOing” with other nations. It’s a successful business model and can be easily replicated with other nations who are competing with US business.

Sud mentions:

<!--QuoteBegin-->QUOTE<!--QuoteEBegin--> Trade, which currently favors India, should be balanced. India should begin purchases of American goods and services much more keenly.  <!--QuoteEnd--><!--QuoteEEnd-->
Not fully agree with this analysis, way too much US products are sold in India than the other way around. In absence of numbers it’s a bit hard to buy this.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Indian companies beneficiaries of the BPO wave should begin American operation, employing American public. <!--QuoteEnd--><!--QuoteEEnd-->
Trust this is happening, but might take time. Definitely won’t be at level worth mentioning by this Nov’s US election which is primarily driving this backlash.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->As a gesture of goodwill, India could make a contribution to the American effort in Iraq, after the UN begins the democratization of the country.<!--QuoteEnd--><!--QuoteEEnd-->
<!--emo&:omg--><img src='style_emoticons/<#EMO_DIR#>/omg.gif' border='0' style='vertical-align:middle' alt='omg.gif' /><!--endemo--> Less said about this the better . Fail to see the connection. Sorry, gestures of goodwill aren’t to be battered away over the lives of soldiers – be it US soldier or Indian. Eye-rak ain't being 'democratized' anytime in near future.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->But any relationship has to go through the test of time. Some situations, which could spoil this party, are: 

* US dramatically restrict outsourcing by law.
<!--QuoteEnd--><!--QuoteEEnd-->
Will go out on the limb to say it can't happen. At best there'll be some local legistlaions to prevent govt jobs/business going abroad. Business community just won't let it get to that. And we know as to how tight MNC folks are with powers be. <!--emo&--><img src='style_emoticons/<#EMO_DIR#>/wink.gif' border='0' style='vertical-align:middle' alt='wink.gif' /><!--endemo-->


<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->* India does not act on US request to further tighten high tech exports in nuclear and missile technology.<!--QuoteEnd--><!--QuoteEEnd-->
Err, we are talking about India or Pakistan here? <!--emo&:whistle--><img src='style_emoticons/<#EMO_DIR#>/whistle.gif' border='0' style='vertical-align:middle' alt='whistle.gif' /><!--endemo-->


<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->* Indian costs rise too fast and become prohibitive for outsourcing.  <!--QuoteEnd--><!--QuoteEEnd-->
Possible, but think we have hit the peak. From what I've seen in most of cases, clients in US are the price drivers.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->*  Dramatic change in the make up of the government after April 2004 Elections in India.
  * Under any political compulsion, US begin pulling back outsourced jobs.
<!--QuoteEnd--><!--QuoteEEnd-->
Seems like there'll be status quo on Indian front and Eye-rak is lately driving all news cycle in US. So not sure if it's an issue.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->  *  No Indo-Pak settlement is reached; hence threat of war is constant on the sub-continent.  <!--QuoteEnd--><!--QuoteEEnd-->
Oh well - cost of doing business. Whatever India does Pakis will around to sour the taste - agreement or no agreement.


<!--QuoteBegin-->QUOTE<!--QuoteEBegin--> This will also plug the gap between shortages of scientific talent in USA <!--QuoteEnd--><!--QuoteEEnd-->
Greenspan had hinted to this in one of his discussions with Congress. Also, had read somewhere that when the tide of baby-boomers retirement hits it’ll in fact benefit US.

[Guest]

High-Tech Group: Outsourcing Threat Is 'Exaggerated'
By Paul Villella
April 1, 2004
A growing number of U.S. companies are sending work overseas in search of lower costs. India, with many educated English speakers, is a leading destination for the services sector. This "offshore outsourcing" is getting blamed for layoffs and slow job growth.
Offshore outsourcing has emerged as an issue in the Presidential campaign, as outsourcing spreads from the manufacturing sector into the service economy and affecting white-collar workers, many with higher wages and skill levels.

If you’re running a U.S. company and are sending some of your jobs overseas, you're what Democratic Presidential Candidate John Kerry calls a "Benedict Arnold CEO".

Threat Downplayed

Now, the American Electronics Association (AEA), the nation's largest high-tech business group, has sparked controversy by downplaying the threat posed to American jobs by offshore outsourcing.

AEA represents more than 3,000 companies with 1.8 million employees. Its 3,000+ member companies -- many of them with operations in the Washington area -- span the high-technology spectrum, from software, semiconductors, medical devices and computers to Internet technology, advanced electronics and telecommunications systems and services.

In a new white paper, "Offshore Outsourcing in an Increasingly Competitive and Rapidly Changing World," the AEA says that offshore outsourcing is just one part of today’s dramatically changing and increasingly competitive world.

Outsourcing Not to Blame

The AEA argues that the weak international and domestic economy and productivity improvements are the primary cause of the lost jobs over the last three years -- not outsourcing. "Changes in the international marketplace are posing far more significant new competitive challenges for U.S. companies than is offshore outsourcing," the AEA says.

A recent Forrester Research study indicates that the U.S. service industry will send more than 3 million jobs overseas by 2015. Others cite even more unsettling numbers: "Nationwide, about 14 million jobs are in job categories that could be outsourced overseas fairly easily," says economist Cynthia Kroll of the University of California, Berkeley.

The AEA acknowledges that while some U.S. workers will be hurt, offshore outsourcing is likely to be a long-term benefit for the United States. If protectionist legislation should emerge from the states or Congress, high tech, as the largest exporter, stands to lose the most, the group says.

Global Competition Cited

"Today's world is increasingly competitive. Given the intense competition, many of the companies that outsource jobs overseas have no alternative, since that is exactly what their competitors are doing. Failure to do so will result in an even greater loss of jobs than would be lost to offshoring alone," says William Archey, AEA’s President and CEO.

"The decline of the world's economy, the end of the high-tech bubble, and dramatically improving productivity rates are the largest factors," Archey says. "The United States experienced a similar anxiety to offshore outsourcing in the late 1980s and early 1990s when there was a common view that Japan was going to take over the world. It didn't."

AEA argues that offshore outsourcing actually offers long-term benefits for the United States. For instance, it will force the U.S. labor market to become more competitive, AEA says.

"If protectionist legislation should emerge from the states or Congress, high-tech, as the largest exporter, stands to lose the most," says the AEA’s Archey, who claims that such legislative action could jeopardize $171 billion in U.S. high-tech exports.

Offshore outsourcing is an increasingly contentious issue. Companies need to be extremely careful when deciding on an outsourcing strategy. Executives need to understand and evaluate the potential risks and rewards of outsourcing to determine if it is right for their business – and their employees.

Paul Villella is President & CEO of HireStrategy, a full-service professional staffing firm providing executive search, contract and permanent placement solutions for companies and career management for individuals in the specialty skill areas of technology, sales, finance and accounting. HireStrategy’s customers include Fortune 500, middle market and emerging growth companies across diverse industries.

[Guest]

Why Australia won't offshore to India

[Guest]

http://us.rediff.com/money/2004/jun/29bpo.htm

BPO controversy brings more biz to India

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->About the controversy in the US, Vikram Talwar, chief executive officer of Exiservice Inc, a New York-based company that processes financial claims for US banks and insurance companies in India, said: "<b>During the last six to nine months, we have received millions of dollars of free advertising</b>."<!--QuoteEnd--><!--QuoteEEnd-->

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Outsource or perish, US firms told

[Guest]

Subscription required hence posting in full:
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->http://www.kansascity.com/mld/kansascity/n.../9088397.htm?1c

<b>Outsourcing's explosive success is transforming India</b> BY STELLA M. HOPKINS
Knight Ridder Newspapers

HYDERABAD, India - (KRT) - Four years ago, the 10-story Cyber Towers sat one-third empty on this city's barren outskirts.

Vijay Kumar and other government officials had envisioned the building as the start of a suburban high-tech oasis to woo the world's computer work. But critics questioned whether the southern India city's emerging outsourcing industry had the vigor to grow.

Today, the 158-acre project is nearly full and surrounded by bustling software parks, including one that's home to a start-up by Charlotte, N.C.'s Bank of America Corp.

"Hyderabad has come up on the map," said Kumar, who heads a major push to recruit and serve the information technology industry. "There is no looking back."

India's outsourcing industry is a growth machine.

Leaders are scouting new opportunities and evolving into consultants to capture more business. Workers are invigorated by a newfound success that's transforming lives and a nation. But that prosperity is under stress. Rising wages imperil India's world supremacy in selling high-tech brainpower at Wal-Mart prices.

In the past four years, the industry's sales have doubled - and jumped 30 percent to $12.5 billion for the year ended March 31.

IT spending is on the upswing with the U.S. economy on the mend, so India expects the current year to be even bigger.

And U.S. jobs may be moving abroad faster than thought. Last month, Forrester Research Inc. estimated that by the end of next year, offshoring will have claimed the jobs of 832,000 white-collar U.S. workers since 2000. That's up more than 40 percent from the firm's 2002 job-loss estimate. By 2015, Forrester estimates a total of 3.4 million U.S. jobs will be lost to workers abroad.

Corporate America's motivation is well-known: Offshoring saves money. You have to do it to compete - especially if the other guy does it.

India's cyber players know they have to sell more than cheap labor to win what's up for grabs.

They want to be seen as more than computer code crunchers and call center operators. They want to be partners. They want more sophisticated work, and they want a broader range of clients.

Among the 800,000 people working in India's outsourcing world, there is the excitement of fatter paychecks and the pride and prestige of being players in the new economy.

"We have seen we can win," Atul Takle, a vice president with Tata Consultancy Services, one of India's largest and oldest outsourcers, said over drinks in a Bombay lounge in March. "We are not just a country of snake charmers and elephants. We will never go back."

---
The Forrester report projected that the greatest outsourcing growth during the next 18 months will come from companies already doing it. The firm also said that by 2008, more than half of Fortune 1000 companies will be sending work abroad, up from about one-third now.

India's outsourcing industry hopes to seize new work by anticipating customer needs rather than just taking orders.

Tata Consultancy Services, which counts Bank of America and Wachovia among its clients, increasingly hires people who know an industry, such as banking or manufacturing, rather than just tech experts. Eager to tap the entertainment industry, for example, Bombay-based TCS last year hired a former technology executive from film studio MGM, Takle said.

"You either anticipate the change, or you become a relic," he said. "There is no middle ground."

Ravi Gopinath leads the TCS push for manufacturers' business from an office tower overlooking the Arabian Sea. He talks of software that helps U.S. factories
trim utility costs and helps U.S. automakers slash design costs.

Gopinath will park engineers at customer factories to learn their business and suggest improvements. Customers today are receptive much sooner to a closer
working partnership, he said.

"Their perception of TCS changed," Gopinath said. "Now they see, here is a proactive TCS that is challenging their notions."

Outsourcers also do high-end work.

Bombay-based Patni, a software firm, has latched on to an IT growth area, called embedded systems, that is generating new business. For example, Patni's embedded software runs the mini computers becoming more common in cars for everything from navigation to monitoring engines.

Patni general manager Deepak Khosla said customers "have seen projects work, and now they're developing more strategic relations. It's being discussed at higher levels, not just the IT guys."

---
In February, Gregory Mankiw, a top economic adviser to President Bush, said offshoring could hold long-term benefits for the economy. Bi-partisan tongue-lashing quickly prompted Mankiw's apology for a "lack of clarity" that left the impression he "praised the loss of U.S. jobs."

<b>Despite the politics, U.S. economists generally agree that free trade yields benefits to the nation.</b>

Supporters say the latest move abroad saves billions, speeds work, resolves labor shortages and frees U.S. employees for more creative work.

Critics say offshoring is eroding the middle class.

Forrester's 3.4 million job-loss estimate, the most detailed yet, also projects offshoring will sap $151 billion in U.S. wages. With a starting point of 2000,
the job losses average little more than 200,000 a year. That's a relatively small number of jobs in an economy that has added an average of about 2 million a year the past 20 years.

However, there is no way to count jobs that aren't created in the United States when new IT work is sent overseas.

Indian IT workers and executives, legislators and industry leaders empathize with U.S. workers' worries. But they also point to the United States as a vocal champion of free trade. Now India - with one-sixth of the world's population - has found a lucrative trading niche.

India, with 1 billion people, the world's largest democracy, remains a Third World nation of heart-breaking poverty. But since the early `90s, the economy has been on the move. The government began privatizing state enterprises. Interest and tax rates are down. Malls and apartments are going up. Mortgage lending, auto loans and other financing are rising.

Nowhere is the boom more apparent than in IT, where people muse about retiring at 45. The industry's lush business parks dot India's shantytown squalor, islands of prosperity that could some day help lift the poor from the streets where they sleep on dirty rags.

"It's highly visible, and it's something people are very, very proud of," Alhad Nimbalkar said of the industry.

Early last year, Nimbalkar, 34 and an engineer, bet on outsourcing for a better life. He quit the security of 11 years with an appliance maker - India's old economy to join the Bombay office of Exult, a California outsourcer with global offices and its largest service center in Charlotte. Exult's work includes processing paychecks and accounts payable and tracking employee benefits.

Nimbalkar wanted a challenge, a chance to advance that he didn't have in the factory hierarchy, and a better life for his family. And when working for a U.S. company, he said, "There is this sense of pride shown by your family members."

Nimbalkar bought a new house soon after joining Exult. At 1,240 square feet, it's twice the size of the one he had shared with his wife, their two sons and his parents.

"I could dare to take a housing loan because I can afford it," he said.

In Hyderabad, a city of about 3.5 million, Vijay Kumar couples the discipline of 25 years of military service with a passion for building a legacy.

The retired army colonel heads a federal, one-stop, economic-development shop for outsourcing in the southern state of Andhra Pradesh, home to Hyderabad, one of India's top cyber cities.

Soft-spoken, 53 years old and the father of two teen daughters, Kumar works from early morning to late at night and often on Saturdays, darting to meetings, juggling phones and tending to prospects. One day he's meeting with a Korean company. The next he's hosting a Spanish-speaking group. Then he's negotiating with a U.S. firm looking to add 1,600 workers to its Hyderabad operation.

He commands a storehouse of information on the outsourcing industry, its needs and what India offers. Dark eyes unwavering, he listens intently. "Tell me what you need."

From his sixth-floor office at Cyber Towers, he has helped build the city's outsourcing industry from 359 companies four years ago to 1,079 today.

When he moved into the office in 1999, he'd sometimes stare at the desolate landscape, and wonder how many millions of years the unending gray boulders had seen. Today, in software parks, those boulders landscape gardens, glisten beneath waterfalls and level gullies for parking lots.

"It's an amazing change in a short time," he said.

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The most significant, long-term threat to the industry's growth is a product of its success.

Demand is driving up wages.

Cheap, well-educated, English-speaking labor built the Indian IT industry. Last year, a programmer in India with a few years' experience made $6,000 to $9,000 compared with U.S. wages of $45,000 to $85,000, according to California consultant neoIT.

The IT industry handed out some of India's highest average salary hikes last year nearly 14 percent at the top - according to a survey by Hewitt Associates Inc., an Illinois outsourcing and consulting firm.

Wages also are rising as employees job hop - much like American IT workers before the dot-com collapse. And U.S. companies contribute to wage inflation as they set up operations in India.

Companies sweeten benefits to retain workers and rein in wages. For example, Exult said that in April it extended medical insurance to employees' parents.

In a December report, the Indian government estimated that by 2009 the country's IT industry could be short nearly half a million workers, putting more pressure on wages.

Other low-wage countries, such as China, are angling for outsourcing work. That makes India's IT industry vulnerable to the same search for cheap labor that pushed textiles in the 1800s from New England to the Carolinas and more recently to Mexico and Asia.

India approaches the hurdles with a new energy, and the industry projects its outsourcing sales will more than quadruple to $57 billion by 2008.

<b>"The industry has helped change India's perception about itself, that we can't compete with the world," Arun Shourie, India's former IT minister,</b> said during an interview in Delhi. "We can charm many snakes, but we can do more." <!--QuoteEnd--><!--QuoteEEnd-->

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<b>Exploding the Myths of Offshoring</b>
<i>Far from damaging the economy of the United States, offshoring should enable its companies to direct resources to next-generation technologies and ideas -- if public policy doesn't get in the way.</i>

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US takes back call centre from India

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<b>Outsource firm sues in India</b>
<i>ALLEGED CODE THEFT HIGHLIGHTS FOREIGN RISK</i>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The trouble started when Jolly opened a small research-and-development facility in Mumbai, formerly Bombay, this year and hired a half-dozen employees, including 25-year-old Sudha Iyer. Supervisors reported noticing suspicious activities at Iyer's work station in mid-July and allegedly caught her uploading source codes and design documents and sending them out from her Yahoo e-mail account. After she was confronted, Iyer said she felt ill and went home. She hasn't been heard from since.<!--QuoteEnd--><!--QuoteEEnd-->

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IT Labor Boomerangs Back Home

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<b>TECHNOLOGY BOOM RETURNS BACK INDIA'S BRAIN DRAIN</b> <!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo-->

WHEN Sharan Patil left India and moved to Britain, he was following an older generation of Indians who had emigrated, seeing the West as a land of opportunity.

But unlike that generation, who stayed away, he recently returned to India — part of a growing reverse migration of highly qualified professionals coming home, drawn by the opportunities offered by India’s booming economy.

<img src='http://images.thetimes.co.uk/TGD/picture/0,,147631,00.jpg' border='0' alt='user posted image' />

What began as a trickle a decade ago is now substantial enough to be talked about as a “reverse brain drain”. The lost talent is not only coming home, it is also doing so enhanced by skills and experience gained overseas that could have vast implications for this developing nation.

The centre of this new phenomenon is Bangalore, India’s high-technology capital. By one estimate, more than 35,000 “returned non- resident Indians” live there.

Sudip Nandy, an executive for the Bangalore technology firm Wipro, who recently returned after ten years in the United States and Britain, was surprised at a university reunion to discover how many fellow graduates had followed the same path as him.

“I thought I’d be the only person of my age who had come back. After all, ten years is a long time and many people don’t come back after that length of time away,” he said. “But there were lots who’d been away for up to 18 years and had returned, all in the past few years.”

When he left for the US in 1994, it was to catch the technology boom there. Now, after the Silicon Valley downturn and a stint in London, he is back to cash in on the Indian technology sector’s astonishing growth of 50 per cent per annum.

“The future of our industry is in India and China, so it made sense to come back,” he said. “I sense a tremendous energy in Bangalore now. In the UK, I would only have about one breakfast meeting a week. Now I have three or four.”

For Dr Patil, the chance of advancement far faster than that possible in the National Health Service played a big role in his decision. On his return to Bangalore from Manchester, he immediately got a post as a consultant, a position that would have been years off had he stayed in Britain.

India, still a developing country with millions of poor and no welfare system, also afforded him the chance to make a difference in a way that would not have been possible in Britain.

“The system in Britain was so well-oiled that I didn’t feel I was as useful there as I could be here,” he said. Since he returned, he and a colleague have looked into setting up their own private hospital and insurance scheme for poor farmers who could not afford treatment otherwise.

Manoj Anicatt, an ophthalmologist, opened his own clinic on his recent return to India after ten years away, something he could not have done so easily in Britain.

“Things are much less structured here, which breeds opportunity,” he said. “With more and more people earning more, the health industry is one of the fastest-growing sectors there is.”
While the opportunities may be many, adjusting to everyday life back in India is not always easy.

“When I got back, I couldn’t believe I had grown up here,” Dr Patil laughed. “The chaos, the traffic, the dirt. It took me a long time to stop abusing people in the street for honking their horns at me.”

Families are often the most reluctant to move back to India, especially children who have grown up used to all the mod cons of Western society.

“It’s been hardest on my wife and kids,” Dr Anicatt said. “They miss the cleanliness and convenience. My wife can’t get used to having to trudge around all the different shops for all the items rather than just nipping into Asda.”

Still, the rapid changes in India have made the transition less jarring than it would have been for an earlier generation.

“It’s a different country from the one I left,” Dr Anicatt said. “It used to be that someone wearing jeans would stand out like a sore thumb. That’s not the case any more.”

Mr Nandy said: “There have been some pleasant surprises, like finding out the wine here isn’t too bad. And even the customs people have got a lot politer.”

Bangalore’s main attraction for returning emigrants is that it is perhaps India’s most Westernised city.

“Coming here was a key factor in our decision to return,” Dr Anicatt said. “If we’d moved back to Kerala, we wouldn’t have survived. Just being able to take the kids to KFC makes a real difference.”

Returning emigrants often find that they come home permanently changed by their experience, and their changing needs are starting to change the face of the city. Though Mr Nandy is confident his stomach upsets and frequent bugs will subside in a few months, he can no longer contemplate living amid the chaos of an Indian city street.

He is searching for a house in one of Bangalore’s many spanking new gated communities, residential islands of calm with wide streets, green lawns, swimming pools and no power cuts, built for returning emigrants and for the growing tastes for Western luxury among the city’s smart set. Such luxuries are not within the reach of all returning emigrants, some having taken a considerable salary cut to come back. But even those who have say that they do not regret their decision.

“Everybody thought I was mad to come back, and tried to talk me out of it,” Dr Patil said. “But I feel India is the most exciting place in the world right now because we are still climbing and progressing. It’s much more exciting than when you’ve already climbed. There is so much scope to do things.”

For any young Indian thinking of leaving for Western shores, he has this message: “By all means go, but come back. Bring what you have learnt back with you.”

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->

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Interesting read..

Survey Results Show India's Cost And Quality Lead The Way