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Wipro, other Indian outsourcers expand in the US

The expansion is good business strategy, and also politically correct, say analysts

Wipro, India's third largest outsourcer, is expanding its development center in Atlanta from 350 to 1,000 staff, reflecting a growing trend for Indian outsourcers to expand and hire locally in the U.S. market.

The company said that 80 percent of its current 350 employees were hired locally, and includes recent graduates from reputable academic institutions in Atlanta, experienced professionals and retired army personnel.

India's largest outsourcer Tata Consultancy Services (TCS) said earlier this month that it was expanding its business alliance with The Dow Chemical Company, including setting up a services facility near the site of Dow's global headquarters in Midland, Michigan.

TCS also announced that it was expanding a software services delivery center in the Cincinnati suburb of Milford, Ohio.

Infosys BPO, the business process outsourcing subsidiary of outsourcer Infosys Technologies also said this month that it would acquire McCamish Systems, a BPO company in Atlanta focused on the insurance and financial services market.

Indian outsourcing companies are expanding both in India, and in the U.S., their key market, in anticipation of a pick up in business. Employing staff in the U.S. is expected to go over well with the local community and politicians because of resentment in the U.S. about companies moving jobs to India and other countries, analysts said.

U.S. Senators Bernie Sanders, an Independent from Vermont, and Chuck Grassley, an Iowa Republican, last week introduced legislation, called the Employ America Act that would prohibit firms that lay off 50 or more workers from hiring guest workers.

Political considerations are evidently a factor for Indian outsourcers to expand in the U.S., said Siddharth Pai, a partner at outsourcing consultancy firm Technology Partners International (TPI) in Houston. U.S. companies do not also want to be seen sending jobs abroad, he added.

But there are also strong business considerations that require Indian companies to set up operations in the U.S., according to Pai. Certain types of work even in BPO, such as development of technology platforms for services delivery, and analytical work, require proximity to customers, he added.

Indian outsourcers have to start looking like global players, Pai said. Japanese car makers, for example, manufacture all over the world, because some customers would like to buy locally produced goods, he added.

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More about: Dow Chemical, Infosys, Infosys Technologies, Tata, Tata Consultancy Services, Wipro

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