Indian outsourcing: forget the politics, where are the workers?

What's on the mind of executives running the booming Indian IT firms kept busy by the shifting of work from the West to India?

Not the political controversy, but whether India can produce enough talent to fill the huge demand for workers the trend has fuelled.

"Businesses outsource to India because of our emphasis on quality. The challenge for us now here is whether we live up to these expectations - can we train more people and have enough educated workers to maintain the quality?" said Girija Pande, regional director for India-based IT services firm Tata Consultancy Services (TCS) Asia-Pacific.

Previous reports have said that given current trends, India's schools may not be able to produce enough IT graduates to meet demand in the coming years. Pande's comment comes against the backdrop of growing controversy over the impact of sending software development work and business processes to lower-cost locations like India.

Pande maintains TCS's customers have not been affected by the debate but continue to look to India for cost-efficiency and productivity gains. "I go into customer meetings feeling apologetic about the issue but my customers assure me it is not my problem," he said, adding that the aim of corporations will always be how to improve the bottom line and shareholder value, even if it means taking unpopular decisions.

Labour groups and white-collar workers in the US have long protested the offshore outsourcing trend. Recently, Microsoft's plans to relocate its customer support work in Texas and North Carolina to India added more fuel to the ongoing saga.

"I'm not that worried about what they believe. There is nothing much I can do about it, except keep quiet and wait it out," said Pande. "If we do something, it may be seen as token gestures to address the issue and people can see through those."

Like many others in the industry, Pande believes that attitude of trade unions towards outsourcing is influenced by the general economic climate. "There is no problem when growth happens but people make noise when recession kicks in," he said.

According to market research firm Gartner, the outsourcing backlash against India will fade away in two years as the global economy improves and unemployment levels decrease.

While the outsourcing backlash may take a while to fizzle out, Pande remains bullish about the prospects for Indian IT firms in the interim. TCS has laid out a plan to be among the top 10 IT companies globally by 2010. "We grew by 22 per cent last year," he said. "This year, company margins are under pressure because of the economy but Indian companies usually benefit from such crunch times."

As testament to its confidence, TCS, India’s largest software company, is reportedly gearing for a possible initial public offering (IPO) by the year end. According to various media reports, the firm is expected to complete a prospectus in the next few weeks but has not decided on a firm date to float its stocks.

Rival Indian IT firms Infosys and third-placed software and services exporter Wipro are also seeing sustained growth despite the weak global economy.

Winston Chai writes for CNET Asia