IT, ITeS firms in Bangalore, Hyderabad shifting base to Philippines: survey
10 Jan 2012
Hit by falling rupee, rising costs and non-availabilty of the right kind of skills, information technology/information technology enabled services (IT & ITeS) units, at least in Bangalore and Hyderabad in the South, are looking at new pastures to stay afloat. This clearly indicates that India's prominence as a hub for IT/ITeS hub is fast fading.
Many of the ITeS/BPO firms especially, medium enterprises from Hyderabad and Bangalore, are shifting or expanding bases in the Philippines owing to concerns over infrastructure constraints, cost of doing business and availability of skilled labour, a recent survey undertaken by the Associated Chambers of Commerce and Industry of India (Assocham) found.
"The driving forces are multitude, ranging from ease of doing business, availability of abundant English speaking workforce at lower wages, better infrastructure to government incentives. It is imperative for governments at the centre and the states to quickly initiate remedial measures on war footing to stem the loss as the capital flight will not only severely affect the growth and employment but threaten India's leadership in the knowledge industry,'' said D S Rawat, national secretary general of Assocham.
According to the Assocham Eco Pulse (AEP) study titled `Sustaining India's IT/ITeS Leadership', the prevailing macroeconomic and sectoral conditions have been leading to a shift of ITeS/BPO industry away from India, especially from Bangalore and Hyderabad, to the Philippines.
Such a trend, however, has not yet been noticed in the National Capital Region and Pune.
The IT/ITeS sector helped India to create low-cost, high-quality brand equity as an infotech sector challenger to foreign rivals and the sector's share in the country's GDP has grown from 1.2 per cent in 1997-98 to an estimated 6.4 per cent in 2010-11, the survey revealed.
