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Bangalore fishes in troubled US tech waters

India's technology state Karnataka is launching a drive to lure US industry players facing cost runs due to a sectoral slowdown into relocating their operations to its capital Bangalore.

After some months of agonising over spending cutbacks and layoffs in the United States, which sent ripples of worries through the tech community, Bangalore's bureaucrats have begun smelling an opportunity in troubled waters.

They gleefully point to an 80,000-strong army of software engineers and the low cost of labour and real estate as a crowd-puller to their city, which already has some 925 software firms, including a who's who of global majors.

The Karnataka government says that programmers can be hired in Bangalore for as low as $200 a month and quality office space can be leased at $0.26 to $1.00 per square foot per month.

In the US, entry-level costs would be at least 10 times that.

"Why Bangalore is smiling...and why you should be too!," says an advertisement released in Britain's "Economist" magazine.

"Or how to actually benefit from the slowdown by outsourcing from Bangalore."

Ads are also planned in technology business magazines like Silicon Valley's "Red Herring," Vivek Kulkarni, top civil servant in the information technology department of the southern state, told Reuters late on Wednesday.

"Nothing has changed in our outlook (after the slowdown)," Kulkarni said. "We are very, very competitive. And because of the ads too, people are reacting."

NO LONGER AN INTELLECTUAL SWEATSHOP

He said one foreign technology company was setting up shop in Bangalore every week. In the latest signal of the trend, California-based Versata Inc said on Wednesday that it would trim 15 per cent of its staff and open an India centre.

While using cost as a big draw, Bangalore's officials are keen to show that the city is no longer an intellectual sweatshop, and quality of work matches the best in the world.

"In chip design, you have 48 companies in Bangalore alone," Kulkarni said, adding that the city also was home to 13 of the 26 companies in the world that qualified for Level 5 -- the highest -- of the SEI-CMM model that studies software processes.

The Software Engineering Institute-Capability Maturity Model, or SEI-CMM, is a US-based framework similar to Europe's ISO norms, and is used to rate firms on a scale of one to five.

Bangalore accounts for about one quarter of India's software exports, which totalled $6.2 billion in the year to March 2001.

Kulkarni will be accompanied by a set of business leaders spanning high-end work like digital signal processing to call centres during roadshows in New York, Boston and San Jose from June 18.

The mission will also take part in Santa Clara at "TiECON"-- a show hosted by The Ind-US Entrepreneurs, an organisation, which networks technology professionals of South Asian origin.

At least 25 technology companies listed in the United States have founders or chief executives of Indian origin. About 7,000 technology companies in California are run by Indians.

The roadshow sponsors include the US-India Joint Business Council, the non-profit Asia Society and the tech-laden Nasdaq stock exchange, which opened a Bangalore office in February.

Nasdaq hopes to add several listings soon to the three Indian firms it has now: Rediff.com, Satyam Infoway and Infosys Technologies Ltd.

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