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Impact of oil price on India’s outsourcing
The outsourcing activities of India is very dependent on the future oil price, says major outsourcing think-tanks. India’s cost of living is heavily dependent of oil price. As oil price increases, salary levels in India will rise much faster than the inherent official inflation level. Already there is a shortage of qualified professionals. These professionals are reluctant to work for the end products that make Western companies rich but the hard working professionals get paid one-tenth the world fair market value in Indian Rupees. The net gainer are the India’s outsourcing oligarchs that heavily bribe the Indian Government and pay hefty political contributions to all the political parties and the Western companies exporting jobs from their own countries.
As cost of living increases and young professionals wake up to the reality, cost of outsourcing from India will increase sharply. The outsourcing will continue though till it stays economically viable. In case of IT, the Western companies are hooked in. They cannot transfer the project to other countries or companies because of maintaining the continuity, which is essential for IT projects, and also because of concerns about quality and best practices.
Eventually India will start charging premium price for quality work done. It will be clear to the world that Indian software engineers are just too good.
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