Why Captive IT companies are growing in India
Three times increase in number of captives in India since last three years is certainly a figure to stand up and take notice off. Parallel, the IT service providers too have experienced growth in their business. This is clearly an indication that “IT” is raining in India and India will be the service house of the world soon.
In reality, it is a long way ahead while the signals are all positive. Some of the reasons which are attributing the increase of captive IT companies in India have nothing to do with IT.
In a private conversation with a senior business leader in US, some interesting facts came out. Developed economies are considering India as the next big economy after China and would like to get an entry. Entry into India is always an expense, but smart companies have found that opening a captive IT company gives them instant benefit of cost advantage, quality of work and the most important, a base camp for them to start larger operations in India to tap local market and to export from India to other countries which are highly cost conscious. There are several examples and the number is growing by the day.
Other reasons for opening Captive companies in India are the same old cost saving and becoming competitive, but some of them have gone a step ahead to get talents in India to innovate for them. Indian brains are sought after in Silicon Valley for their originality of thoughts and highly technical orientation. The same quality of people exist in India in much higher number and at a fraction of a cost which is giving several innovation based companies a reason to come to India. GE, Microsoft, Oracle, Yahoo and Intel are few names who have been doing this for years in India.
Finally, it is about the sure shot “Success story” which most find difficult to resist. Last three years have seen the trend accelerating but has less to do with IT than for compelling business reasons.
