What is the effect of India's Election on Outsourcing?

[bbarr]

If you haven't been paying attention, you may have missed the fact that there have been some major developments in India during the past few days ....

1. Indians voted the current PM out of office; while a new gov't has not yet been formed, it will most likely be headed by the leftward leaning Congress Party with support from left leaning parties.

2. The stock market in India had it's biggest one day loss in it's 129 year history.

Will this new government institute a change in the current economic policy that has allowed India to become one of the major centers of global software development?

Will American, British, etc., companies that have been outsourcing to India now find that the economic rewards are no longer there?

- Bruce

 

[AnanthaP]

Nope.

The dollar inputs flowing from the inexorable march of progress (global marketplace, time zone advantage, cheap(er) salaries) will make it impossible for the Indians to change their policies outright.

Also, American and Britsh companies will continue to outsource more and more and "different and different" types of assignments to India. Only they'll be more discreet about it.

Also, most of the top Indian software companies have been around for a long time. (Much before the web boom - and bust). Outsourcing is just one source of dollars for them. Wipro for instance does work for both CISCO and NORTEL in adjacent office blox in Bangalore.

End

 

[Dimandja]

Bruce,

I may have missed the news reports you may have, but there was nothing of consequence to outsourcing, happening in India in the last few days.

Do you have more information on this?

Dimandja

 

[bbarr]

Hi Dimandja,

I haven't heard anything specific to the effects on outsourcing, just the general effects on the stock market and the overall unease (not sure if this is the right word) of investors' reponse to the results.

 

[dkediger]

So by "left-leaning" is there a general uneasiness in the Indian stock market about new labor rules being instituted?

 

[chiph]

The big question is how left-leaning?

Worst-case scenario would be nationalization of major industries, like happened in France in the late 1950's.

Chip H.


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[AnanthaP]

As an Indian from India,

The just voted back congress party started the reform process about 15 years back. Left leaning means more welfare measures out of funds. They had a pre-electoral alliance with left (communist) parties on the "reforms with a human face" type of slogan. This must be translated into a common minimum program. Even the communists don't want to nationalise. They only want to slow down the pace of disinvestment (de-nationalisation) which was once termed as "Selling the family jewels to pay the butler" by an opponent of Margaret Thatcher. You all know where the British economy is today.

Dimandja is right. Outsourcing and IT in general aren't on the new government's priorities. If anything, they will increase government spending - which also means IT spending - and so companies can expect to sell more servers, telecom and comsat infrastructure etc. William G can lobby with the new government to offer heavily discounted office automation suites etc. You know. More government, more license raj, more pies and more fingers in them.

By the way, in a local state which had an elected communist government, they did try a type of "work from home medical transcription effort" involving homemakers. It didn't work. Not from the quality point of view - this was in the most literate state in India - but from the delivery point of view. They gave it up.

So no worry. The state of the iIndian economy is outside the powers of the pols. We are all wondering when the next price hike in fuel will hit us.

Come to India for your next holiday.

End

 

[bbarr]

AnanthaP, thanks for the feedback. Already been to India on holiday.

In some cases business is outside the power of pols to control, but they can still do a lot to mess it up.

on a somewhat related note, france has declared the 35-hour work week to be a disaster:

http://www.suntimes.com/output/news/cst-nws-france18.html

yet, despite the fact that history has proven socialism to be an economic failure, there are still people who refuse to accept this fact.

 

[chiph]

In any case, people are watching the Indian election. Not only because of interesting events like Mrs. Gandhi turning down the prime ministership, but because India is a nuclear power.

Chip H.


____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first

 

[ejazzz]

My view is India is going down the same route Malaysia did in the 80's, when large corps like Compaq and IBM were manufacturing PCBs etc in Malaysia. When the Malays got too big for their boots, the funding and investment was pulled from beneath their feet.

Bear in mind the Malays were far more educated and technolically advanced than the Indians.

India should not believe in all the 'hype', just because things are on the up now, does not mean it will last forever.

The IMF and World Bank have thier claws deep in the INdian economy. A few external factors could bring the whole country down.

Plus the disparity of wealth is also causing friction and that in turn may have an effect.

All in all, I would advise the Indians to keep playing the 'passive wog, who work their asses of for the White man' if they want to keep in the Wests good books.

 

[AnanthaP]

Ejazzz,

Malaysia was and is a one party state with a declared state religion. (Others get some rights). India is and will always be a secular republic.

Where are you from ijaz? Come on man. Step out of the wainscotting.

Regarding Compaq and IBM, it's economics. It's cheaper to get programs written from India than USA. Anyway, the servers that hold the intellectual properties are probably in Australia or US. It's different from hardware where you can stop production, destroy assets, strike and delay shipments.

Good advice ijaz. Work your asses off I mean. We need a work ethic instead of provocative statements. All countries in and around South Asia do get some aid (and directions) from IMF and the WB. After all this part of the world remaains a basket case (relative to first world but not to sub saharan africa) becuse we fight with one another.

In this forum at least, I don't see people treating Indians with disdain. Lot of debate on outsourcing but very balanced. Nothing personal or blatantly provocative.

End

 

[ejazzz]

Anan- trust you to bring rleigion into this discussion.

My point was not about religion, merely pointing out historic facts and possibilties of the future.

My work ethic actually is work smarter.

BTW I'm from the UK.

 

[cdogg]

ejazzz,

Let's try and keep it professional. There's no need to interject doltish comments that could be interpreted the wrong way, perhaps as racist remarks. It appears that you have a personal attachment to the issue which can cause deficiency in your argument.

If you want to talk facts and give a negative opinion about the country's outlook, fine. But don't try to belittle an entire culture or another person's opinion in the process.


~cdogg
[tab]"All paid jobs absorb and degrade the mind";
[tab][tab]- Aristotle
[tab][navy]For general rules and guidelines to get better answers, click here:[/navy] faq219-2884

 

[mwarren]

I'm in the UK and in the last few days there have been reports that banks and financial institutions here are breeching our data protections laws by outcourcing this type of work and information to India.

It seems alot of campanies have gone quiet on this one until a legal precident is set.