Many transnational Corporations (TNCs) have set up factories and offices in India. The country is an attractive location to TNCs because the population speak good English, they have strong IT skills and they work for lower wages than people in many other countries. Companies like Toyota, Volvo and Hyundai manufacture cars in India. Companies like ASDA, BT and Virgin Media have call centres in India.
Advantages of TNCs in India
There are many advantages of TNCs. India has benefited in many ways:
- TNCs have created jobs and offered education and training to employees
- the additional wealth has led to the multiplier effect
- some TNCs have set up schemes to provide new facilities for local communities
- the infrastructure of the country has been improved, with new roads and internet cabling
- TNCs pay tax to the government, which can be spent on development projects
Disadvantages of TNCs in India
There have also been some disadvantages of TNCs in India:
- some corporation leaders have taken advantage of the relaxed environmental laws in the country by creating lots of pollution
- the conditions for workers in factories can be very harsh
- many TNCs are owned by foreign countries so economic leakage occurs, where profit is sent abroad
- the best jobs are often given to foreign workers from the TNC's country of origin
- TNCs use many of the country's natural resources - a drinks-bottling plant in Kerala, India, was shut down due to its impact on local water supplies
India answers the call of prosperity (Filed: 08/11/2003)
An economic star rises in the East as more Western firms seek quality staff at a low cost, says Dominic White.
Gaurav Malik, 24, is flirting on the phone with a secretary from Newcastle-Upon-Tyne. Tapping his mouse to book her boss's post-lunch BT conference call, he then bids her a charming goodbye. Replacing the receiver with a flush, she has no idea that Gaurav is 4,000 miles away in Noida, New Delhi, where it is 6pm on Monday evening. Swirling around in his chair and loosening his headset, Gaurav casually reveals that he's been working for 11 hours already. He drove to college at 7am to attend lectures for his postgraduate business law course, then came straight to work at 11am. In three hours' time, he'll drive the crumbling roads 15 miles home to his mother, his three elder brothers, their wives and their three infant children. Gaurav is just one of the legions of young Indians manning cubbyholes in call centres across pockets of Delhi, Bangalore and Hyderabad, servicing scores of British companies such as Barclays, HSBC, BA, Prudential, and Norwich Union.
Despite the furious protests of UK unions, and growing pressure in the US for preventative legislation on websites such as hireamericancitizens.org, the caravan of Western companies on a passage to India is growing. Growing still faster is the number of English speaking graduates on the subcontinent. There are 2m every year, many of whom are happy to take call centre jobs. With an average starting salary of 7,000 Rupees (£100) a month, they may earn a quarter of their UK counterparts' wages, but that is five times the national average in India. "I see myself as a manager here within two years," says Gaurav, whose car, designer glasses and gold ring show just how far your income can go when, like most Indians in their 20s, you live at home with your mum. His brothers graduated before the call centre boom arrived three years ago and so followed in their late father's footsteps by setting up their own ventures. "At that time this kind of work was not an option for them," he says. "But it's great that these kind of businesses are now flourishing in India. It's giving people the opportunity for a new way of life." India's 1.3m new mobile phone subscribers each month are a testament to that. Poverty remains endemic in India, but the feel good factor among its burgeoning middle class - and the under 25s who make up half of the one billion population - is tangible. "I think double digit growth within the next decade is a distinct possibility," says Ashok Lahiri, the government's chief economic adviser. If he is right, India could become the turtle to China's hare in terms of foreign investment, thanks to its English speaking traditions, democracy, entrepreneurial spirit and strong higher education.
Ian Rippin, the 35-year-old site director of BT's Noida call centre, is in tacit agreement. "They learn things like a sponge, and their enthusiasm is infectious," he says of his 500 staff. "All businesses come here for cost, but they stay here for quality." Given how overqualified Gaurav and most of his colleagues are for this kind of work, it's little surprise that many get bored quickly. A report by Dimension Data this week claimed that turnover rates of call centre staff in India have reached 60pc annually, twice the level in the UK. However, the skills pool is vast, and there are plenty of new faces eager to replace the leavers. "We have only advertised jobs three times in the last two years," says Summit Bhattacharya, executive vice president of strategic planning for HCL Technologies, the Indian outsourcing company that runs the BT building at Noida. "We had more than 20,000 responses to 150 places."
If the facilities at BT's 53,000 sq ft operation are anything to go by, the attractions of working in a call centre, compared to a shop or hotel - the normal alternatives - are obvious. The centre is virtually identical to 30 other "next generation contact centres" that BT is developing in the UK, and another one it is building in Bangalore, far beyond the reach of the Communication Workers Union. With its state-of-the-art equipment, funky desk lighting, free canteen, gymnasium, library, and ATM, it puts most UK call centres to shame.
Seated in pastel-hued booths, 20-somethings chat happily to each other, then, the second a call comes in, answer the phone in impeccable English. "That stuff about us making them watch Eastenders to copy Dirty Den's accent is absolute nonsense," says Rippin. While some other companies, particularly those based in the US, encourage their Indian staff to mimic their domestic twang, BT goes in for a different type of voice training. It is called, in rather Orwellian fashion, "voice and accent neutralisation". "When I was training I was told to adopt a neutral accent, like the BBC news presenters," says Gaurav, whose mother tongue is Hindi, but who learned English from kindergarten and thus needs little coaching. Teleconomy, a UK consultancy, showed that more than three quarters of British callers using Indian call centres couldn't tell whether their call was being handled in Britain or India. Nearly half thought their operative had an Irish, Welsh or English accent. Little wonder that Sir Keith Whitson, chief executive of HSBC, believes his Indian call centre staff are superior to those in the UK.