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Last Updated: Thursday, 8 April, 2004, 13:39 GMT 14:39 UK
India IT firm establishes US arm
Infosys HQ
Infosys has more than 20,000 staff, mostly in India
Indian software giant Infosys is to invest $20m (11m) in the United States to set up subsidiary supplying consultancy services.

The new business will be called Infosys Consulting and will hire 500 staff at its Texas base within three years.

"This will counter the outsourcing sentiment out there," said Infosys Consulting chairman S Gopalakrishnan.

The outsourcing of jobs to low wage countries, particularly China, India and Mexico, is a US election issue.

Both Republican and Democrat politicians have campaigned on pledges to prevent the loss of US jobs abroad if they win the election in November.

Expansion plans

India's world-class IT industry and pool of well-qualified, English-speaking software engineers has made it a popular destination for companies looking to outsource computing functions.

Infosys, which is listed on the US Nasdaq stocks index, is headquartered in Bangalore, the city which has developed into India's hi-tech bastion.

The US subsidiary will spearhead Infosys's plans to move into business consulting, which currently provides only 4.5% of group revenues of $764m in the 2002-3 financial year.

Infosys Consulting's chief executive will be Stephen Pratt who formerly worked as a partner at Deloitte Consulting.

Mr Pratt said hiring staff in the US meant "the quality will be higher and the risks will be lower" - a common reason given by US firms for outsourcing to India.

The move steps up the pace of Infosys's international expansion. In December 2003, it spent nearly $23m in cash on its first overseas acquisition, buying Australian software firm Expert Information Services, which specialises in software solutions for the telecoms industry.

Infosys has more than 20,000 staff, mostly in India, and more than 30 offices worldwide.

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10 Oct 03  |  Business
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10 Jul 03  |  Business

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