Where do Indian firms go to outsource? China

The International Herald Tribune: "When Infosys Technologies began scouting for an alternative to India as a source of unlimited, low-cost human resources, the fast-growing company came up with one answer: its home country's archrival, China. Now, a year after Infosys Technologies (Shanghai) was set up, the venture center has 200 employees and four multinational customers.

Infosys, the Bangalore-based software services company, and other top Indian outsourcing rivals, including Tata Consultancy Services and Wipro Technologies, are doing application development and maintenance work in China as they grow rapidly to keep up with booming demand from the West for their services. And they are quickly concluding that only China has a worker base equal to India's in terms of cost, quality and scale. Expansion there also offers the ability to cater to the local and regional markets, including Japan.

China also offers Indian outsourcing companies a low employee turnover rate. For instance, Tata Consultancy's staff turnover in China is less than 6 percent a year, compared with 15 percent in its Indian operations. The company says it may double the number of employees in China in the next 18 months from 180 now. According to Pande of Tata, the wage differential is about 12 percent to 15 percent. So while an entry-level programmer in India might earn $125 a month, a Chinese equivalent might earn $142 to $147.

China has some 200,000 information technology workers - compared with India's 850,000 - in 6,000 local companies, according to some estimates. Over 50,000 Chinese software programmers are being added to this pool annually.

Wipro set up its China unit in August to develop software and maintain it for the company's global clients in the United States, Europe and Japan. Though Wipro aims to expand the unit to 200 employees next year from 10 now, projects that require a high level of management skills are unlikely to be done there soon, said Masaki Nagao, Wipro's chief executive for Japan and China operations.

"