Outsourcing Fuels Purchasing Power in India

Ann All

Companies are looking to India not just to supply inexpensive labor to help produce their products, but also to provide a growing pool of consumers eager to buy them.


According to a recent Technology Forecasters survey, the number of electronics companies manufacturing products in India will rise by 63 percent over the next two years. A more interesting figure, in our opinion: The number of firms marketing products there will rise by 24 percent during the same period.


The research firm says the number of Indian households earning at least $4,500 a year will double over the next five years. Income at that level will drive a "significant" increase in spending on goods like TVs and refrigerators, it says.


Outsourcing plays a major role in the improved financial outlook for India, of course. Hewitt Associates predicts that pay levels in the country's service and manufacturing sectors will grow 12.3 percent to 15 percent in 2007, the biggest increase in Asia. It also had the region's highest average salary increase in 2006.


The growing purchasing power of India's residents, particularly that of young folks who crave the latest and greatest in cell phones, is fueling a market for semiconductor chips, leading a roster of companies including Dell, AMD, Nokia, Motorola and Samsung to build manufacturing facilities there.

Add Comment      Leave a comment on this blog post
Dec 31, 2006 7:53 AM jgo jgo  says:
It would be a lot more interesting if markets in India and Red China were actually open to goods and America's best and brightest science and tech workers.  We're still waiting for the quid pro quo. Reply

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