Answer the questions on the article "Mixed Signals"
wages in the Indian IT sector are starting to resemble those in the West. Some companies are bringing the jobs back home.
1. There have been confusing messages in recent weeks which suggest that the outsourcing boom in India has reached a peak and that the financial benefits of outsourcing work to the country may be coming to an end.
2. The search engine company Like.com recently announced it was closing its Indian engineering site and transferring jobs back to the US because wages in Bangalore had simply become too high. The company's chief executive Mr. Shah said, "Bangalore wages have been growing like crazy." Just before the announcement, one of his Bangalore engineers could earn 75 percent of the US salary. Two years earlier, the same engineer had been earning 20 percent of the American salary.
3. In Britain, the Indian government estimates that there are 5,000 jobs that have been created by 'reverse outsourcing' or inward investment from India. All are in e-commerce and software. One comedian made a joke about middle-class Indians from Bombay dialing a call center in Scotland to book a train ticket to Delhi (and complaining that they cannot understand the Scottish accent). When will this joke become reality?
glish (United States)
4. Wage inflation - together with the rising strength of the Indian rupee caused by an economic growth rate of 9 percent - is certainly changing the way that Indian IT companies think about doing business and how to present their services. It is no longer possible to only provide a service to Western clients that is simply cheaper, according to Krishnakumar Natarajan, the president of IT Services for MindTree Consulting, an international IT consulting company headquartered in Bangalore. Quality and expertise have become essential now. "A key challenge is that costs keep going up," he said. He said that one solution was to reduce overheads by concentrating people and operations, something that is easier for larger companies.
5. Industry bodies are certainly confident about the future, despite rising salaries and property costs. The National Association of Software and Service Companies (Nasscom) reported recently that the industry grew by 30.7 percent in the last financial year and that revenues increased to just under $40bn.
6. So how is the industry managing this? Partly it is the result of remaining price competitive. Despite the headlines and the talk of rising salaries, wages here remain considerably lower - especially for entry-level employees - than in the US. In India, starting
the US.
salaries in the IT industry begin at about $10,000, about onesixth of the equivalent salary in
7. In addition, the sharp growth in Indian wages has been mostly limited to the IT sector.
In other areas such as call center operations, wages are still considerably lower than in the West. One challenge that companies are having to deal with in these areas, however, is the high staff turnover. And another threat India faces is from international competition, mainly from its neighbor and strategic and economic rival, China, but also from new outsourcing centers such as Russia and Dubai and even Egypt.
8. Mr. Natarajan and others remain confident that India will be able to deal with such challenges. He even said that there may be something in the genetic make-up of his country's citizens that gives them an advantage over their rivals. "Indians tend to be very good at serving people. We are service-orientated," he said.
1. What is the main reason why some companies want to close down their outsourcing operations in India?

2. What is ‘reverse outsourcing’?

3. What is the cause of the rising strength of India’s currency?

4. How does MindTree Consulting intend to reduce their costs?

5. Why is the Indian outsourcing industry still growing despite wage increases?

6. In which sector is there a sharp growth in wages?

7. In which sector are Indian wages much lower than in the West?

8. What human resources problem do Indian call center operations have to deal with?

9. What outside threat is the Indian outsourcing industry facing?

10. What characteristic of Indian people gives the Indian outsourcing industry a competitive advantage, according to the chief executive of MindTree’s IT Services?

The main reason some companies want to close down their outsourcing operations in India is due to the significant increase in wages in the Indian IT sector. Companies find that the cost advantage they once had by outsourcing work to India is diminishing as Indian wages approach those in the West.

‘Reverse outsourcing’ refers to the practice of companies bringing jobs back from overseas locations to their home countries. In this context, it involves companies relocating jobs from India back to countries like the United States due to rising wages and other factors.

The rising strength of India’s currency is primarily caused by its high economic growth rate, which was at 9 percent. A strong economy tends to lead to a stronger currency.

MindTree Consulting intends to reduce their costs by concentrating people and operations, thereby reducing overheads. This strategy is easier for larger companies that can centralize their operations.

Despite wage increases, the Indian outsourcing industry is still growing because it remains price competitive compared to the West. Starting salaries in India are considerably lower, especially for entry-level employees, making outsourcing to India economically attractive.

There is a sharp growth in wages in the IT sector in India, as mentioned by Mr. Shah of Like.com. Wages in Bangalore, for example, have been growing rapidly.

Indian wages are much lower than in the West in call center operations and other sectors besides IT. However, turnover rates can be high in these sectors.

Indian call center operations have to deal with high staff turnover as a human resources problem. This turnover rate can be challenging for maintaining consistent service quality.

The Indian outsourcing industry faces threats from international competition, primarily from China, but also from emerging outsourcing centers such as Russia, Dubai, and Egypt.

According to Mr. Natarajan, the chief executive of MindTree’s IT Services, the competitive advantage of the Indian outsourcing industry lies in the service-oriented nature of Indian people. He suggests that Indians are very good at serving people, which gives them an edge over their rivals.

Explanation: