How do you look at China and some other countries as a competitor to India in the outsourcing space?
The market pie for outsourcing is growing. We were almost 100 per cent earlier and as a result there is only one way to go (which is down). Having said that, the work in India itself is going to increase quite dramatically.
Other countries like China, Philippines, Vietnam, and Mexico will also get a share of the global pie.
More and more countries will participate in this global delivery model, but India will not lose its competitiveness. Even today, with the salaries going up, and over the next 7-8 years, I do believe that if I had a dollar, I will put it on India.
Overall maturity in methodology, project and process management, good work ethic and English language proficiency give India a competitive advantage over other low cost countries.
How much do you expect this industry to grow?
I think we will have to readjust models and capacity. Today, the industry absorbs 150,000 engineering graduates out of about 420,000 graduating. It is now down to a choice of 1:3. It could come down to 1:2 in the future.
In 1991-92, the industry used to hire about 100 people out of 200,000 people. So the choice was a lot more at that point of time. So there is a dilution in the industry as a result.
Overall, I am confident that the industry will double over the next five years.
We hear that there is a sentiment against outsourcing in the US. After the elections, do you think it will have an impact on outsourcing? Yes, Democrat candidate Barack Obama said that outsourcing is inevitable.
Yes, he has said that it is inevitable in today’s world and people have recognised that though he is not the happiest guy. However, he has also questioned NAFTA and in general, Obama is a little bit more protectionist than the Republican candidate, McCain.
Having said that, like India, the US also has reached a stage in this industry where the governments don’t matter all that much. In India, the IT industry has grown through multiple governments, which have had dramatically different philosophies and outlooks.
Finally, the most important thing is the business case and the value proposition that is being offered. As long as we can offer that, American businesses will continue to outsource.
Image: The Serengiti, which has the iTOPS block. | Photograph, courtesy: iGate
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