Indian IT companies should move up value chain: Murthy

Indian Information Technology companies should try to move up the value chain and not aim at only bagging call centre orders, according to Infosys Technologies Ltd chairman and chief mentor N R Narayana Murthy.

Speaking about the key challenges and the strategies to offshoring, Murthy said that Indian companies should let foreign clients do the talking on the economics of outsourcing to their government, while Indian companies should remain "low key" and more action-oriented.

Murthy said India should not do 'grand-standing' in public as being champions of free trade. "Taking stands against developed countries where there is no strategic advantage will not get us anywhere and instead we should have bilateral talks with countries," he said.

Steve Clemmons, executive vice president of New America Foundation said the politics of offshoring is unfair. Speaking about the ban, Clemmons said there was overwhelming focus on security and total absence of economics.

New America foundation is a think tank on economic American economic policies. In reply to a question on the government abolishing tax on BPO, Murthy said there is no clarity on the definition of what activites can be called ancillary and auxiliary.

On February 3, 2004, Jaswant Singh, India's foreign minister said outsourcing of activities which are ancilliary and auxilliary in nature will not be taxed.