Dell, the world’s largest computer maker, said it will set up its fourth call centre in India and scout for land for a planned manufacturing plant in Asia’s third-largest economy. The company said it planned to add 5,000 jobs in India over the next two years, bringing its work force in the country to 15,000.
Dell, which also develops software in India, and other companies like Nokia are now setting up Indian manufacturing bases to fuel local market demand in the country’s $700-billion economy which is forecast to expand by close to 8 percent in the year to March 2006.
Texas-based Dell, which employs more than 10,000 workers in India, along with compatriots like General Electric have set up huge business process outsourcing units in India, home to a vast pool of low-cost English-speaking workers.
Dell is also looking to set up a manufacturing center in India, a move that could help boost the sale of Dell computers here, President and CEO Kevin Rollins told reporters after a meeting with Indian Prime Minister Manmohan Singh.
The Round Rock, Texas-based company will hire 700 to 1,000 workers for a new call center in Gurgaon, a satellite town of the capital, New Delhi, Rollins said. The new call center, the company’s fourth in India, will open in April, he said.
The other new hires will staff call centers in the cities of Bangalore and Hyderabad in southern India and Mohali in the northern state of Punjab. Also this year, the company plans to double the staff at its product testing center in Bangalore, which currently employs 300 engineers, Rollins said.
During his previous visit to India in April last year, Rollins had said Dell would make India a hub for its software development and back-office work.
India is not only a resource base for talent, but is now also a market space, Rollins told reporters. Our intent is to be here for the long term. The time is right to consider setting up a manufacturing site in India.
Currently, the company has three call centers in India, a product testing center for corporate customers and a global software development center. Some 10,000 people are employed at these facilities.
Scores of Western companies have been cutting costs by shifting software development, engineering design and routine office functions to countries such as India, where English-speaking workers are plentiful and wages are low.
India’s telecoms and information technology ministry expects planned foreign investment in the booming sectors to double to $22 billion in 2006 as global firms set up bases in the country.
Rollins, who met Prime Minister Manmohan Singh, declined to put a figure on the company’s planned investment, timing or a probable site for the proposed manufacturing plant aimed at Dell’s currently miniscule share in an exploding Indian market.
We have a 3 to 4 percent market share in India, Rollins said, adding the target was to raise it initially to the 10 percent the company enjoys in much of the rest of Asia.
Rollins estimated India had the capacity to buy nearly 10 million desktops a year, over the next three to five years up from 4 million units currently.
Dell also plans to double the 300 product development engineers it now employs in India by 2008.
Vast Untapped Market:
India is a huge market in its own right, he said.
Commercial demand for computers is soaring in India as thousands of companies computerize their processes. Falling prices, cheaper finance and rising salaries are fuelling retail demand for desktops.
Dell competes with global players such as Hewlett-Packard, International Business Machines and local giants like HCL Infosystems and Wipro.
India’s information technology and call centre industry directly employs 1 million people, and indirectly about three times that number in jobs ranging widely from transport and security to catering and housekeeping.
Rollins said Dell’s fourth customer call unit in India would be situated in the tech-hub of Gurgaon on the outskirts of Delhi. It is expected to add up to 1,000 workers to Dell’s India payroll by the end of 2006. India will be the only country in Dell’s 30-site contact network that supports customers in all geographic regions.
Romi Malhotra, managing director at Dell’s Indian operations, said the company would raise its head count to 15,000 workers in the next couple of years.
A report co-authored by consultancy firm McKinsey in December forecast India’s business services and information technology exports would surge by more than 25 percent a year and reach $60 billion by 2010.
Heavy demand for outsourcing of services such as payroll processing and insurance claims has helped the industry grow at a compounded annual rate of 56 percent since 2000.
Our teams in India have integrated well with Dell’s operations, Rollins said, adding he expected the firm’s global sales growth to exceed industry growth during 2006.
But Rollins said his company’s expansion plans were not limited to tapping the talent, but also benefit from the growing demand for desktop computers and notebooks.