IT exports increasing in India

June 6, 2005

Representing a 34 percent year-over-year increase from the previous year, India's software and IT services exports were recorded at $12 billion in 2004.

That's according to India's National Association of Software and Service Companies (Nasscom), and is obviously good news for the country's various tech companies. But it has to be weighed against China's IT growth, which is about 20 percent higher and has led some observers to predict that China will eventually replace India as the world's premier IT outsourcing destination.

For India today, and perhaps China tomorrow, the next frontier of IT is services, a higher value-added realm with superior profit margins. If India makes such a transition, it will have defied those North American and European observers who stereotype India as a destination for high-volume transaction processing -- essentially, an IT sweatshop.

Keep in mind that India's appeal is often based on lower cost, despite Dell's counterintuitive attempts to claim that Indian call center reps are better suited to handling Americans than Americans. But services and customized technology are where countries like India and China can put their increasing technical expertise -- no longer the sole province of the U.S. -- to real use.

It may, frankly, be nothing other than unstated racism to assume otherwise. As Thomas Friedman wrote today in the New York Times, "India is taking work from Europe or America not simply because of low wages. It is also because Indians are ready to work harder and can do anything from answering your phone to designing your next airplane or car. They are not racing us to the bottom. They are racing us to the top."

Source: Line 56