IT, Hi-Tech cities losing sheen: ASSOCHAM report

BANGALORE:  Medium sector Information Technology (IT) and IT Enabled Services (IT/ITeS) in Hyderabad and Bangalore may shift to Philippines, according to the  trade body, Associated

Published: 11th January 2012 01:52 AM  |   Last Updated: 16th May 2012 06:12 PM   |  A+A-

BANGALORE:  Medium sector Information Technology (IT) and IT Enabled Services (IT/ITeS) in Hyderabad and Bangalore may shift to Philippines, according to the  trade body, Associated Chambers of Commerce and Industry (ASSOCHAM).

The trade body, which has brought out many reports, of which some promote the investment climate in the state while others have recorded the willingness of IT companies to move out of the city.

In its latest report, it has stated that current developments taking place in the Southern part of the country indicate that India’s prominence as an  IT/ITeS  hub is fast ‘fading away’.

The new report titled  “Sustaining India’s IT/ITeS Leadership’, states that many of the ITeS/BPO firms especially, medium enterprises from Hyderabad and Bangalore are shifting or expanding their bases in Philippines owing to concerns pertaining to infrastructure, cost of doing business and availability of skilled labour.

“The driving forces are multitude, ranging from ease of doing business, availability of abundant English speaking workforce at lower wages, better infrastructure to government incentives. It is imperative for governments at the Centre and states to quickly initiate remedial measures on a war footing to stem the loss as the capital flight will not only severely affect the growth and employment but threaten India’s leadership in the knowledge industry,” D S Rawat, national secretary general of ASSOCHAM said. It has, according to the ASSOCHAM report, resulted in the options of other places for relocation.

Therefore, there exists a real threat to the country in terms of its swift relocation to competing locations like Philippines, Vietnam, China, Poland, Hungary, Mexico, Brazil, Egypt, to name a few the report said.

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