At the well-tended Bangalore campus of MindTree Consulting there is an air of quiet but determined industry. Casually dressed employees walk briskly between buildings, drop in for cappuccino at the complex's own gourmet coffee shop or else gather to chat on the closely clipped lawns. One can almost hear the gentle purr of activity at this international IT consulting company, which last year cleared more than $100m ([pound]50m) in revenues.
But for all the positive noises coming out of companies such as this - whose clients include Avis, Volvo, Cendant - there have in recent weeks been confusing messages emerging about the Indian outsourcing industry, some of which have suggested that the outsourcing boom may at the very least have reached a plateau. There have even been the first hints that the financial benefits of outsourcing work to booming India may be coming to an end.
The Silicon Valley search engine company Like.com recently made the headlines when it announced it was closing its Indian engineering site and transferring jobs back to the US. This "reverse outsourcing" was ordered because wages in Bangalore had simply become too high. "Bangalore wages have just been growing like crazy," the compa-ny's chief executive, Munjal Shah, wrote on his blog.
While companies have long been aware that the wage differential between the US and India for educated, capable people was reducing, Mr Shah said to compete for the best staff, he faced having to increase the salary of one of his Bangalore engineers to 75 per cent of the US level. Just two years ago the same engineer had been earning 20 per cent of the American salary. "In general this wage inflation is really good for my employees and great for India. I am so proud of the strides forward that India has made," he continued. "However, this huge run up in the wages has destroyed the [return on investment] I referred to earlier. So today we decided to consolidate all of our engineering and research efforts back to our HQ in California."
In the US, Indian investment is worth $2bn a year and the president of the Confederation of Indian Industry, Sunil Bharti Mittal, met recently with the Democratic presidential frontrunner, Hillary Clinton, to brief her on the number of Indian companies outsourcing to US firms - a task he undertook after Mrs Clinton became embroiled in the perennial political "controversy" about the loss of US jobs. In Britain, the Indian government estimates that there are just 5,000 jobs that have been created by reverse outsourcing or inward investment from India. All are in e-commerce and software. But how long might it be before one stand-up comedian's joke about middle-class Indians from Bombay dialing a call-centre in Glasgow to book a train ticket to Delhi (and complaining that they cannot understand the Scottish accent) becomes true?
Wage inflation - along with the rising strength of the Indian rupee driven by an economic growth rate of 9 per cent - is certainly changing the way that Indian IT companies think about doing business and how to present their services. Krishnakumar Natarajan, otherwise known as KK and the president and chief executive of MindTree's IT Services, said it was no longer possible to think purely in terms of providing a service to Western clients that was simply …