Indian Wages

Interesting article in PC World yesterday;

Rising Wages Prompt Riya to Pull Out of India
http://www.pcworld.com/article/id,133663-pg,1/article.html

Although I dont contract a lot of work to India I do from time to time and I recently assisted a client source some voip developers for an internal application and whilst the man hours quoted were a little over the top I thought the hourly rate was very reasonable - especially as I wasn't contracting a single self employed individual but a company with corporate overheads/structure etc.

My issue with Indian resources have always been a communication 'percentage' that needed to be buffered into any project (lol - before you ask chill - my first wife was Indian and half my friends in Australia are Indian). It's just a fact that whenever dealing with people who dont have the same background it takes extra time to communicate with them.

Could explain why I find it easier to deal with Canadians :P
http://deancollinsblog.blogspot.com/2007/04/canada-nicer-littler-brother.html

Having said this I have spoken with people who've said it's out of control and they have had projects fail because key staff have left projects mid implementation.

I guess it's part of life and to be expected over time salaries would go up but I'm just wondering how viable the Indian outsourcing market really is if they are on a 50%-75% salary par with Australians/USA/Europeans etc.

The bigger question of course is has the windfall in outsourcing over the last few years being turned into a viable long term market (eg like Dubai's oil money) or squandered among a select few (e.g. Saudi Arabia).

What happens to India if the worlds outsourcing markets finds a new vendor just as fast as it found India?

Will people be making jokes about calls being answered in Indonesia next year?

Has enough infrastructure been put in place to develop on an ongoing basis without the major USA contracts or will it slide backwards just as fast as it shot forward in the first place?

Any thoughts?


Cheers,
Dean