For the last few decades, India has been the so-called back office for the world
While China became the manufacturing hub for many daily use products, multinationals from all around the world outsourced most of their back-office operations and other call center services to India. Most of them were Labor intensive and not so intelligent work. This was a great boon for a highly populated, fairly educated, and unemployed group of people. It really raised the standard of living millions of young Indians. But when young educated Indians traveled abroad and joined large multinational corporations they went on to become world-class managers and technocrats. The CEOs of Microsoft and Google springs to mind but there are many at various levels of management with many top companies all over Europe and North America.
What did not happen so far was with all this education and transfer of information, no real Indian company emerged on the global scene? That is all going to change now. India will be the real powerhouse for SaaS – software as a service – products. The recent geopolitical upheavals and the pandemic situation further supports and helps India to emerge as a major force in this space. The cost arbitrage, remote working, and the latest “Zoom“ type technologies will force foreign companies to establish major research and development centers in India. The office centers in India will be as easy, convenient, and accessible as working next door in an office in Silicon Valley. Accompanied by this will be an ecosystem that will develop in India with excellent idea generation, transfer of information, and entrepreneurship.
What will be the underlying theme?
“If the software didn’t have to be installed in person and could be deployed and managed over the internet, we could do it from India.“ One of the major companies that have been taking advantage of this wave of cost arbitrage is Zoho. It is a Chennai based company employing more than 7000 people. Still, a private company, but we will soon discuss another exciting Indian company that will soon become a global name. There will be many more companies that will join the party and will become public. Tanla will be one of the companies that will be part of this growth opportunity. Listen to what international emerging market investor Mark Mobius said “Focussing on small and Midcap companies in India without debt.” How can he miss out on Tanla?
The biggest issue will be the infrastructure, living facilities, recreation, and sporting facilities of international standards with clean air. Our major cities like Mumbai, Delhi, Bangalore, Kolkata, Chennai, and Hyderabad are at bottleneck capacity and unable to expand. My thinking is many new satellite townships or cities will emerge to cater to these needs. The question is do we have the political will to clear all the hurdles to make this happen. If not India will be missing out on the biggest possible needle mover of the Indian economy.
Author: ©Abraham George, CEO, Founder at AllSeasonsPTL Capital Management Ltd.
