Whither India!

rsom · Post by **rsom** » Wed Jul 21, 2010 10:22 am

Gents/Ladies:

These are purely my views and i seek an audience who can add their views and/or disagree .

I moved to US in 1999. Wrong Timing at Hindsight.India & IT sector in particular exploded after that ( say in 2002/3). I have US citizenship , own a home here. But here is what worries me:

In major areas that i would like to compare with Peers (who choose to be in India or get back in time,voluntarily/involuntarily)

1-Career : My Career here has been far from satisfactory. I make the money but at best equated to a senior analyst level. Contempories are CFO's or CEO's in India.

2-Money Objective: Ahead of the curve (in 2004) till RE in India took off. With the amount of money that i could have made had i been in India, I loose 10 to 1. It is more like double dipping. Indian properties shot up 300-500%, US properties dropped 20-30%, if one is lucky - stagnant.

3-Standard of Living : Yes. Definitely the life of an average Middle Class in USA is better than India.

The Big Problem however is that i have become too Americanized. I need my weekends - Long days - A Big No. Vacations - Yes... and of all No freaking Midnight calls.

I spent 6 weeks in India last summer. I was a total misfit. I could not drive a car,could not park. If i had a driver , i was worried that i was making him Wait!! and worse of all, Inflation is way too high. I was still in an era where Cinema Tickets were Rs 15 for a First class. Things have moved a zillion in India. I dont know how, but i spent close to $ 3000 for a 45 day stay in India without rent and air tickets. Luckily i had a place in India which was the only smart thing i did.

People are talking of 1 Crore like it was 1 Lakh 20 years back. 1 Freaking crore is 200K . Lot of money to hold on to by my standards.

I was in the Airport to pick up my wife and kids arriving from my inlaws place and i was the only "MAD" guy on a weekday waiting in the lounge. Rest were all Drivers.. So i was made out to be a educated Driver / Unemployed guy wasting his time in Airport. The Attitide sucked.

So, long story short. If you went back to India, you are either a American returned Desi with a lot of money and therefore your lifestyle has to match local or, someone who has returned from USA as a failure. Lifestyle i guess is so important in India. To maintain that lifestyle in a Metro city costs a minimum 50 -60 K a Month. ( I would say $ 1500)

Now if i had that money can i not retire in a place like Jacksonville,Fl or Mesa/Tuczon, Arizona.Atleast nobody cares if i drive a Corolla or an Audi.

I seriously think and I am sure i am not going to be popular here for this.. India's growth is very elongated . It is not overall. IT guys make the money.( 3% of people) Things are expensive. So a young graduate entering a city would need atleast 50 Lakhs to buy an apartment some 40 miles away. I think the inflation(Real Adjusted) is close to 100% I have a feeling that over the next 10 years India will become so expensive that outsourcing makes no sense and things have to move!! Maybe it is very extreme view( more like the fox and the sour grapes) but with this kind of inflation does this look possible.

In 99 i was converting dollars to INR, today i am converting INR to $ when i am shopping in India. This is the bottomline. Clothes are cheaper here, Food is cheap in US. The only thing that needs to be controlled is Insurance rates and that is definitely a possibility it will happen if OBAMA goes on for one more term.

If i have a job paying some $$$ to keep my lifestyle here, i should just stick on.

COMMENTS Anyone!!

PeterGriffin · Post by **PeterGriffin** » Wed Jul 21, 2010 7:34 pm

Good post! A lot of your opinions echoes my thinking too!
I've thought a lot about the concept and the future of outsourcing. As inflation increases in India, wouldn't the cost of outsourcing increase too? This increase could ultimately push companies to look for other low-cost providers in other countries, right? May be its already happening and i'm too ignorant to catch up on the latest.
On the other hand, the influx of outsourcing seems to have increased in multiple folds over the last few months. This is happening in at least a couple of companies that i know of as i have friends who are in much senior levels in their respective domains.

Anyways, please do keep posting. Looking forward to seeing more from you.

Sid · Post by **Sid** » Wed Jul 21, 2010 7:55 pm

rsom;307894I spent 6 weeks in India last summer. I was a total misfit. I could not drive a car,could not park. If i had a driver , i was worried that i was making him Wait!! and worse of all, Inflation is way too high. I was still in an era where Cinema Tickets were Rs 15 for a First class. Things have moved a zillion in India. I dont know how, but i spent close to $ 3000 for a 45 day stay in India without rent and air tickets. Luckily i had a place in India which was the only smart thing i did.

People are talking of 1 Crore like it was 1 Lakh 20 years back. 1 Freaking crore is 200K . Lot of money to hold on to by my standards.
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I think the inflation(Real Adjusted) is close to 100% I have a feeling that over the next 10 years India will become so expensive that outsourcing makes no sense and things have to move!! Maybe it is very extreme view( more like the fox and the sour grapes) but with this kind of inflation does this look possible.

Thats the funny part... Even though India has such high inflation, the conversion value of a $ to Rs is pretty much constant at around 45 (varying between 42-48). That shows that either inflation is not so high in India, or the US government is fudging numbers, and real inflation is high in US too. That would mean that the value of your $200K has actually gone down now. Buy something worthwhile in India with your dollars while you can.

rajradio · Post by **rajradio** » Wed Jul 21, 2010 7:58 pm

dear friend,

going by the thread you should stay in US. The thread was a complete with...me, myself , my comforts, my money, and my retirement. India cannot beat your life in any of these.

If your thread mentioned, parents, near and dear ones, social life, social responsibility and the big question' can we and should we give back something to our country?', I would have tried to convince you otherwise.

High inflation economies also abound in high growth, there is a positive side to it. From a physician stand point I feel that saying you need 10 lakhs for getting treated is not so unaffordable anymore. When I was in US there were business men from delhi who flew in to see one of my famous colleagues for just a consultation. so you can get shocked at the high growth (skewed I admit) of India or decide to participate in it and try to create niche in your own sphere.

If outsourcing stops then India will do something else. Economies are full of boom bust cycles. A large populous nation of smart brains will not go waste. India will be fine without us, just the big question. WHERE DO YOU THINK YOU BELONG? My answer is India, find yours.

each for himself. I used to hate the fact that my weekends in US were so slow. I also did not like dropping kids off at all the activities. Now my kids in India walk around the grandma pester her for a new kind of dis for lunch, that to me is is more enriching than balavihaar in USA.

So there u go. my thoughts just to show how the other side thinks. Wish you luck and keep posting.

RK

Sid · Post by **Sid** » Wed Jul 21, 2010 8:01 pm

About outsourcing in India getting expensive and move out... I actually don't think that's going to happen. Just like you can get food in India at every income level (Rs 5 idli on roadside to Rs 1000 cup tea at Lila Palace), you can outsource your work at all price levels. Today everyone is cramming in Bangalore because everyone else is there. But the moment other smaller towns are accepted by IT companies as favorable IT destinations, outsourcing companies too would move their offices there.

India has so many poor but willing-to-work-hard people, that something really terrible will have to happen for the entire outsourcing industry to move out of here. That means that today's tier 2 and tier 3 cities are going to be tomorrow's next growth engines. Don't forget, a tier 3 city in India has population equivalent to many metro centers in US.

PeterGriffin · Post by **PeterGriffin** » Wed Jul 21, 2010 8:05 pm

sid_earth;308033
India has so many poor but willing-to-work-hard people, that something really terrible will have to happen for the entire outsourcing industry to move out of here. That means that today's tier 2 and tier 3 cities are going to be tomorrow's next growth engines. Don't forget, a tier 3 city in India has population equivalent to many metro centers in US.

Aha! Good thinking! I guess, this might most probably be the way to go for companies who want to reduce their costs! The good thing is that the boom will stay in India! Not sure if it'll still be called a boom though!

returning_indian · Post by **returning_indian** » Wed Jul 21, 2010 8:09 pm

What wages have shot up in India in IT? 1% of total employees may be making more money but most fresh graduates enter at standard package of 2.2lacs/annum. That is nearly $5-6k/yr. Here it is atleast $40-50k/yr plus all the vacation days, 8hr rule, health benefits etc etc for fresh graduate. There may be 10-15% across the board raise every year but endless supply of fresh graduates keep costs in check. Project managers work twice as hard in India and get paid one third to one fifth of project manager in US. They control all the deliveries and maintain quality control. Some people at the top are making lot of money but that is obvious of any organization. In recent days I have known 3 big employers here in US who have outsourced all their projects to India and laid off thousands here. For example SAP employee here makes atleast $100-150/hr. In India the same employee make $20-30/hr. Talk about cost saving. Outsourcing is here to continue to India and speed just increased with recession. Which other country offers such huge pool of low wage engineers who can understand English and communicate with end client? All Indian companies hire by 10s of thousands every year.

BeeAndButterfly · Post by **BeeAndButterfly** » Wed Jul 21, 2010 8:13 pm

As far as off shoring of jobs goes, there is no guarantee (just as there is none in the US) and we should assume the risk. MNCs (justifiably) are notorious for moving jobs to cheaper locations. In fact, as far as commercial IT jobs (as opposed to government/defense IT jobs) goes, there is a higher risk of off shoring from the US than from India.

go2chennai · Post by **go2chennai** » Wed Jul 21, 2010 8:37 pm

I have a slightly different viewpoint. Just like India started off with low-end outsourcing work (due to costs being extremely low), Vietnam and a few Eastern European countries are going through the same phase now. I feel as these low-end outsourcing work start moving out more in bulk, India will move up the value chain and start to do more research/development work. I'm not in IT and I see it happening in my industry. As of now, the majority of research is still being done in US/Europe, but there is a definite growing trend towards outsourcing this to India. Pretty much all major players in my industry have set up shop in India are are increasing their investments rapidly.

My 2 cents

GodblessIndia · Post by **GodblessIndia** » Wed Jul 21, 2010 8:48 pm

PeterGriffin;308015As inflation increases in India, wouldn't the cost of outsourcing increase too? This increase could ultimately push companies to look for other low-cost providers in other countries, right? May be its already happening and i'm too ignorant to catch up on the latest.
On the other hand, the influx of outsourcing seems to have increased in multiple folds over the last few months. This is happening in at least a couple of companies that i know of as i have friends who are in much senior levels in their respective domains.

Anyways, please do keep posting. Looking forward to seeing more from you.

PG,

I work for an MNC with ever increasing presence in India. When we decided to expand operations (read Mfg and Eng support like 3D modeling, drafting etc) as late as early 2008, we chose Tier2 cities like Coimbatore and Hubli inspite of the fact that we already had a huge presence in Bangalore.
The reason being some tier 1 cities are kinda out of reach, especially for Mfg oriented companies due to lower Margins compared to IT services/product based companies. However, the good news is India is big country rich with talented people. As we progress into this decade, we shall 'growth' (aka outsourcing etc) occurring in smaller cities and towns, which in my mind is the right way to go.

Bottomline: India as a whole is still viable and attractive for FDIs, until these politicians screw things up pretty bad.:))

-GBI