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US firms bring outsourcers on board

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Political rhetoric in the US about the loss of service-sector jobs to India has not deterred American companies from consolidating their offshore outsourcing business in the country.

Early last month, for example, IBM announced the acquisition of Daksh eServices, India?s third-biggest business process outsourcing (BPO) company.

IBM is estimated to have paid about $160 million and the deal marks its entry into India?s fast-growing $3.6 billion BPO industry. IBM has a large IT services business in India, with more than 7,000 employees.

A few days later, Citigroup announced that it would buy the listed shares of E Serve, a BPO subsidiary, at an estimated cost of $126 million. Convergys, Electronics Data Services (EDS) and Affiliated Computer Services (ACS) are looking to acquire bits of GE Capital?s large BPO business in India.

Citigroup and GE are pioneers in the offshore BPO business in India.

Other US companies looking to set up an offshore outsourcing base in India include Coca-Cola, and Wall Street investment banks such as JPMorgan and Morgan Stanley have set up subsidiaries in India in recent years. HSBC announced in April that it would set up a new facility in India this year to provide analytical inputs to the bank?s global research work; it already has a back-end transactions processing centre located in Hyderabad.

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