India: US firms push outsourcing companies to hire local

NEW DELHI — Having created nearly 300,000 US jobs over the past five years, India's IT industry is now using the promise of job creation to win outsourcing contracts from American firms, India's Mint newspaper reports.

"India’s outsourcing firms are battling tightened work permit regulations and a backlash in the US, their largest market, against the movement of technology jobs offshore, and this push by customers to hire more American engineers is beginning to play a role in some outsourcing decisions," Mint's Pankaj Mishra writes from Bangalore.

That means Indian IT firms like Infosys and HCL are now creating jobs for Americans in Michigan and Wisconsin to win contracts from companies like Michigan's Consumers Energy and Milwaukee-based Harley Davidson, the paper said.

HCL won a contract to manage Consumers Energy’s information technology (IT) infrastructure earlier this year. As part of the transaction, it opened a software development center in Michigan with plans to hire 500 engineers over the next few years.

Meanwhile, Infosys, India’s second biggest software firm, won an outsourcing contract from Harley-Davidson in July that will require it to open an operations center in Milwaukee, Wisconsin, for the motorcycle maker.

The US locations will need to be competitive, cost-wise, however, as a July-September survey of 671 executives in the outsourcing industry by HfS Research found firms were prepared to outsource to US-based firms for 15 percent cost savings versus 25 percent savings in India.

In the US, Indian firms face competition from niche firms such as Systems In Motion (SIM) that only focus on local delivery of outsourcing projects, Mint said. SIM already has Thomson Reuters Corp. as a client.