Practice Test Discussion

Q)

PASSAGE 13 (Questions 1-5)

Born out of the forces of globalisation, India's IT sector is undertaking some globalisation on its own. In search of new sources of rapid growth, the country's outsourcing giants are aggressively expanding beyond their usual stamping grounds into the developing world, setting up programming centres, chasing new clients and hiring local talent. Through geographic diversification, Indian companies hope to regain some momentum after the recession. This shift is being driven by a global economy in which the US is no longer the undisputed engine of growth, India's IT powers rose to prominence largely on the decisions made by American executives, who were quick to capitalise on he cost saving to be gained by outsourcing noncore operations, such as systems programming and call centres, to specialists overseas. Revenues in India's IT sector surged from $4 billion in 1998 to $59 billion last fiscal. But with the recession NASSCOM forecasts that the growth rate of India's exports of IT and other business services to the US and Europe will drop to at most 7% in the current fiscal year, down from 16% last year and in 2007-08.

Factors other than the crisis are driving India's IT firms into the emerging world. Although the US still accounts for 60% of the export revenue of India's IT sector, emerging markets are growing faster. Tapping these more dynamic economies won't be easy however. The goal of India's IT firms for the past 30 years has been to woo clients outside India and transfer as much of the actual work as possible back home, where lower wages for highly skilled programmes allowed them to offer significant cost savings. With costs in other emerging economies equally low, Indian firms can't compete on price alone. To adapt, Indian companies which are relatively unknown in these emerging nations are establishing major local operations around the world, in the process hiring thousands of locals. Cultural conflicts arise at times while training new recruits. In additions. IT firms also have to work extra hard to woo business from emerging-market companies still unaccustomed to the concept of outsourcing. If successful, the future of India's outsourcing sector could prove as bright as its past.

[OBC(PO) , 2010]

What is the author trying to convey through the phrase "India's IT sector is undertaking some globalisation on its own"? 


  • Explanation

    The author is trying to convey that Indian IT firms are engaging in expanding their presence internationally.

    - Share with your friends! -

    Login to post your comment here...

    Comments