The Indian information and
communication technology (ICT) industry and Indian software
professionals have earned global kudos for exceptional technical
prowess, meticulous software development skills and quality
processes for over two decades.
However, the highly regarded industry
with its three-million plus software professionals, comes under
attack every now and then from the very nations that save costs by
outsourcing to India -- dubbing it as a nation producing 'cyber
coolies', to being 'Bangalored' (a term used when losing a job to an
Indian outsourcing centre) and now to being referred to as 'chop
The West's fear of losing jobs to any Indian software development
centre not necessarily in the city of Bangalore has given rise to
another word: Bangalore phobia.
The latest attack on the industry from US Democrat Senator Schumer
from New York raised several eyebrows in India. To add insult to the
injury, Indian software firms will have to bear an additional burden
of US$200-250 million in the form of H1B and L1 visa fee hike.
By targeting Indian software firms and singling out an iconic firm
like Infosys, the US senator missed the ingenuity of the Indian
To dub the work being done by the Indian software professionals as
low-tech is not only unfair but unwarranted. And to term the Indian
IT services companies as 'chop shops' is a great disservice
especially when they have contributed to the development of American
and European economies. A recent Nasscom-Evaluserve study estimates
that in 2009 the US and European companies saved $25 to $30 billion
by outsourcing software development work to Indian companies.
The $130 billion Indian ICT industry forms not only one-tenth of
India's GDP but has built substantial knowledge capital too. It has
two big components--the $78 billion IT industry and the $63 billion
Telecom industry, as per recent studies by Dataquest and Voice&Data.
Of the $78 billion generated by the IT industry, two-thirds come
from export of IT services and one-third is contributed by the
domestic IT sector. Within the IT services exports of $52.6 billion,
exports to the US form nearly three-fifth and Europe adds up to
nearly one-fifth. Even those who started by offering body shopping
services to the American and European clients in the 1980s today
operate at the top end of the value chain - IT consulting and
business transformation services.
So it is software development and maintenance services valued at $17
billion that is the biggest chunk of the software exports while new
high-end projects in the IT consulting and package implementation,
software product development, telecom software and engineering
services value more than $3 billion each.
India's strength lies in its extremely robust higher education
system with a strong focus on mathematical skills and English
language, which is a result of a conscious investment made by the
government in setting up institutions like the IITs, IISc, RECs,
ISRO and BARC to gain technical self-sufficiency.
"Alumni of Indian government-funded engineering schools like IITs
have created intellectual property for the US and strengthened their
ability to offer a better standard for American citizens," said IDC
"The US lawmakers must recall that H1B-L1 visa regime was created as
a legally sanctioned means to allow US firms to induct scarce skills
to benefit the US economy," it states further.
Even if we were to empathize with the argument that the US economy
needs to banish unemployment, these countries cannot overcome skill
shortage in the long run.
The drastic drop in the enrolment of American students in the
science and engineering programs is an indicator that there is no
quick fix for growing the local talent pool in the software space.
Both America and Europe must thank the Indian software industry for
coming to their rescue and increasing productivity of their major
The Western world has to realize that by adopting restrictive
policies on free access to talent-based services, they can only hurt
their own economy. Moreover, they won't be able to top the list of
countries vying for a limited pool of skilled professionals, and
thus power their economies, in the absence of a reliable IT partner
As for Indian software companies the best advice comes from Infosys
founder N.R. Narayana Murthy: they must continue to innovate and
enhance their productivity so that the world looks up to the
technical prowess of the Indian software sector.
Sanjiv Kataria is
a strategic communications and PR counsel.
He can be reached at