U.S. IT firms find India attractive for relocation

By Shujaat Bukhari

SAN JOSE (CALIFORNIA) MARCH 28. The increasing opportunities in India are proving to be a strong attraction for many U.S. information technology companies to relocate themselves in India, particularly after they started pulling out from other Asian markets because of growing political uncertainties. The drastic cut in workforce by IT majors in the U.S. is likely to prove a boon for India, as thousands of professionals will be moving back.

The meltdown in the U.S. stock market, particularly IT stocks in NASDAQ, has led to a change of mind in many U.S. IT companies that are seriously considering to relocate to India. The Silicon Valley is becoming too costly for them. Mr. Riaz H. Naqvi, director of India Infotech Centre in San Jose, said, ``At least 80 companies from the U.S. have shown interest in investing in India.''

Only a few months ago the Software Technology Parks in India (STPI) had opened its first international branch in San Jose. It is aimed at an interface of U.S. and Indian entrepreneurs so as to create a larger base for Indian companies as well. But essentially, Mr. Naqvi said, it was to promote small and medium companies. According to him 280 companies have come to the U.S. Over 100 have branch offices here and around 1,000 professionals have set up their own companies. The infotech centre provides a panel of expertise for the companies on law, taxes and immigration. ``The STPI had certainly an impact in the last five months'' claimed Mr. Naqvi.

However, a major development has been the recent cuts in workforce by U.S. companies. Half of the 1.50 lakh IT professionals all over the U.S. are from India. But with 30,000 of them being on their way out of the companies which have declined to extend their H1B visas, this is seen as a boon to Indian IT, as most of these will be back soon. However, highly skilled professionals are still continuing with big U.S. companies.

Mr. Naqvi felt that the concept of relocation was not confined to cities such as Delhi, Bangalore or Mumbai but needed to be extended to other smaller cities where fresh brains could be utilised for this competitive sector.

The U.S. is the pre-eminent producer and consumer of electronic and information technology products and services. Present exports from India to the U.S. in the IT sector are about $2 billion annually. The strength of India in the area of software skills, quality and competitive programming is well recognised across the world. The U.S. is seen as a mix of state-of-the-art technology and marketing skills whereas India is a huge reservoir of cost competitive and quality programming, brain power and software skills.

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