IT companies see profit in opening a nearshore unit

CHENNAI/BANGALORE: When Wipro founder Azim Premji explained at the Q2 earnings conference that opening a near shore centre in high-cost Atlanta would actually net gains for the company, it perhaps mirrored the Indian IT industry’s preparedness to look beyond its India-centric approach.

The traditional reasons to globalise have been proximity to the customer and a diverse employee mix. Now, trackers say, rupee polevault and the race to grab larger ticket size projects may be pushing Indian companies to globalise in a bigger way. Wipro CFO Suresh Senapathy says, “Near shore, of course, becomes more favourable than it was nine-months ago. It is excessive rupee appreciation in relation to other currencies in the last nine months that makes the difference.”

The rupee appreciation, in the last year, has underscored the stark difference between Indian software services majors such as TCS, Infosys and Wipro, and their MNC counterparts like IBM and Accenture who have large operations in India. The wave of worry that affected Indian IT majors perhaps did not crinkle the forehead of MNCs. The reason: The scale of their global operations. For instance, while India is next only to the US in terms of employee strength for IBM, it has just about a fifth of its employees here. On the other hand, Indian software majors have only about a fourth of their employees abroad, including those onsite.