India is Getting Expensive

You have to know this story will be in every economist’s quiver of “I told you so” presentations within six months:

CEO: India is getting expensive
Today 7:42 AM (John Blau)

(InfoWorld) – Escalating personnel costs in India — one of the world’s largest markets for off-shore software development services — have prompted business software vendor SAP to begin looking elsewhere for lower-cost, skilled programmers.


  1. This may be more misleading than communicating – what is not clear is the scale to be built across various places, from which level onwards the cost/attrition becomes an issue -In general multinationals/indian companies that understand the aspirations of the developers do manage to run efficient operations in India. Professional service firms find that china is not any better economically – in fact on most of the available operational metrics, china base looks more costly to sustain. The argument is relevant only if onee were to think that only cost is the accrued advantage for setting up a development base in India – far from it in reality. Read my post

  2. I just got a quote for development of a simple data input and data mining tool from India. It included a project manager, developer, and QA person. $8,000/month Ouch! Better to stick to local developers.

  3. Western companies *will* find India expensive. Local entreprenuers still find it cheap. If your lifestyle dictates that when you fly into Bangalore, you stay in a hotel at $300-500 per night (more than what half of Indian population makes in a year), and recruit at a 5-star hotel, yes, that can be as expensive or more expensive than New York. But only western companies will do that sort of thing …
    It is an existential problem: the only way to tap India’s super-cheap talent is to know the culture – i.e become Indian.
    Hint to Steinnon: locals won’t pay anything like the price quoted to you.