US MNCs Flock to India for Outsourcing for Jobs

An abundance of motivated young professionals is luring American businesses to base their global operations in Indian cities.

[ABS News Service/27.03.2025]

In India’s most advanced cities, American companies are racing to set up more and bigger offshore campuses: fully staffed offices with high-skilled Indian professionals, performing functions vital to global business.

The concentration is most stark in bits of Bengaluru. Apul Nahata of RapidAI, a Silicon Valley-based medical technology company that uses artificial intelligence to interpret brain scans, can look out the window of the office he leads in India and see a “density of companies” relevant to his work.

“If I walk a half-kilometer, I see Google, Qualcomm, Nvidia, Visa, Samsung and Amazon right here,” said Mr. Nahata, who spent 10 years of his career in California. He is especially tuned in to his neighbors in tech, but JPMorgan Chase has the biggest of these offices, with 55,000 workers spread across Bengaluru and four other Indian cities. Even all-American retailers like Target and Lowe’s have centers employing 4,000 to 5,000 Indians in Bengaluru.

Under President Trump, the United States is upending some of its most important trading partnerships. He is particularly irritated by the $46 billion U.S. deficit in the trade of goods with India. Mr. Trump has also complained about undocumented Indian workers.

But Mr. Trump’s stated policy solutions — higher U.S. tariffs meant to force India to lower its trade barriers, and the deportations of immigrants — will do nothing to slow the evolution of the long partnership that binds together American companies looking for skilled workers overseas and India’s abundant pool of labor.

Twenty years ago, many Americans feared that the outsourcing of office jobs to lower-wage economies like India would mean fewer jobs in the United States. Many kinds of jobs have moved overseas since then, and many of those have since been automated. But the American economy needs more skilled workers.

Now many American companies are finding those workers in India. As of 2024, there were about 1,800 offshore corporate offices in India, owned by hundreds of foreign-based multinational companies — most of them American. There are 1.9 million people in India working for foreign companies, with 600,000 to 900,000 more expected to join them by 2030.

Together, the offshore business centers in India earned about $65 billion last year, more than the value of American imports to India. By 2030, they are expected to earn $100 billion or more. The business centers are springing up in other countries, too, like Mexico and Poland, but most are in India.

Across India, these foreign-owned offices are now the primary driver of commercial real estate. An estimated 50 new ones were established over the past year. The expectation is that 100 more will join them during 2025.

This is welcome news for India, which needs 10 million new jobs each year just to keep unemployment in check. Even with stronger economic growth than any other large country’s, India’s enormous population of young people is in danger of falling behind.

The model for these offices has been around since at least the 1990s, when international companies started trickling into India, attracted by an educated middle class that could work for very low wages. As the internet shortened the virtual distance between India and the United States, Americans became familiar with Indian-accented workers at call centers and faraway tech support.

The business has changed a lot since those days. Indian wages have picked up, and these offshore subsidiaries are no longer providing only low-value services. They are full-fledged branches of American headquarters, not just outposts, let alone temporary offices that provide outsourcing for information technology services. In fact, that sector announced a reduction of 64,000 jobs in 2024.

While salaries have gone up over the years, they are still about a quarter to a third of their dollar-adjusted equivalent in the United States. Managers of these offices, known as global capability centers, acknowledged the savings, but they said multinational companies were just as drawn to the quality and abundance of potential Indian workers.

“Where else can you scale up with 2,000 engineers, or marketing professionals, within a year?” exclaimed one executive, who asked not to be named because he was not authorized to speak publicly.

Another point of consensus about the growth of offshore centers is that Covid-19 played a crucial role, as in so many other parts of office life. Pari Natarajan is the chief executive and a co-founder of Zinnov, a consultancy that helps companies set up shop in India. He has done this work since 2002 and witnessed successive waves of enthusiasm, the greatest of which started crashing ashore four years ago.

“During Covid, companies realized that they could have teams anywhere — anywhere — and then people are equidistant from each other,” said Mr. Natarajan, who usually works from Manhattan.

Pure Storage, a company that makes data-storage hardware used around the world, is one of the newcomers here. Its co-founder John Colgrove, a Silicon Valley legend known as Coz, helped to start the company in Mountain View, Calif., in 2009.

Pure’s offices in Bengaluru, on high-rent Church Street, have a California tech feel: open-plan seating, espresso machines, acres of monitors and humming data rooms. Customized murals refer to Bengaluru and the rest of India. But the office has also taken pains to replicate the exact dimensions of the desks stationed in the Silicon Valley headquarters.

Ajeya Motaganahalli has been building up the Pure Storage office for the past three years. He is a vice president — Indians holding “V.P.-level” leadership jobs at the centers are common, he said. The chain of command runs around the world, he said, with Pure Storage’s reporting lines going up and down between California, Bengaluru and a third center in Prague.

Ekroop Caur, a secretary with the state government of Karnataka, is the official responsible for the growth and maintenance of Bengaluru’s foreign subsidiaries. One of her priorities is to help companies find suitable spaces, and talent, not just in Bengaluru, which is bursting at the seams, but also in other cities in the state of Karnataka.

The offshore office centers are full of tech start-ups like RapidAI and Pure Storage, but some venerable American corporations are part of the movement.

Pitney Bowes, founded 105 years ago in Stamford, Conn., by the man who invented the first postal meter, employs 11,000 people around the world, mostly still in the business of shipping. And about 85 percent of its shipping-technology work force is in India. Pitney Bowes started its Indian operations long before the current wave, setting up in Noida, an exurb of New Delhi, and Pune, an industrial city near Mumbai.

Anisha Johar, who has been with Pitney Bowes for a decade, works on its communications team. “I never thought I’d have a global role from India,” Ms. Johar said.

American companies are assembling their work forces in India mainly because it has become difficult to find the right kind of workers in the United States. Studies find that a third of all new engineering jobs go unfilled, while nearly 1.2 million Indians graduate with engineering degrees every year. Lower-wage American workers, who lost jobs as manufacturing work shifted to Asia, have been stranded without retraining.

Deborah Kops, the managing principal of Sourcing Change, has been working on this kind of business, especially in India, since the early 1990s.

“We’ve got an inexorable trend right now, where enterprises understand that you can globalize the work,” Ms. Kops said. She has tried setting up global centers within the United States but says that “we just don’t have the education engine” to staff them.

“Can you get 5,000 folks who know how to do this kind of work? You can’t,” she said. “But you can do it in India, and you can do it in other places in the world.”