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Financial Times: Cosy in Bangalore

EXTRACT: Shell last year set up a technology centre in India delivering high-end technical studies, projects and services for the group’s global businesses.

By Joe Leahy
Published: July 24 2007 03:00 | Last updated: July 24 2007 03:00

Most people know that India’s talent crunch is driving up the wage bills of the country’s computer services outsourcing companies. But less well-known is the impact the rapid growth of the IT industry is having on more traditional sectors in the country’s domestic economy. As India develops, its own demand for civil, mechanical, construction and other types of engineers is soaring.

But most of these are being snapped up by the outsourcing industry, leaving oil and gas companies, such as Reliance Industries, or domestic engineering firms, such as Larsen & Toubro, starved of experienced engineers. Those who are not picked up by the domestic IT industry are snapped up by foreign companies. Indian companies complain that foreign oil majors, which are short of talent globally, are entering India willing to double the salaries of engineers knowing that talent on the subcontinent is still cheap compared with global rates.

Shell last year set up a technology centre in India delivering high-end technical studies, projects and services for the group’s global businesses. Even some of India’s IT outsourcing companies are offering business process outsourcing specifically for foreign oil services companies. For the engineers themselves, the choice is simple. A cosy, well-paid existence in a call centre in Bangalore or life on a wind-battered oil-rig in the Bay of Bengal? The less adventurous will always choose Bangalore.

Copyright The Financial Times Limited 2007

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