The Indian outsourcing company, which has received criticism for its part in UK on-shoring, intends for the European centre to be used primarily for restructuring Magyar Telekom, a Deutsche Telekom subsidiary that Wipro signed a restructuring deal with earlier in 2010.
The move marks a long-term plan by Wipro to bring its services into closer proximity to its customers and to make use of “local powers”. Wipro already has 20 bases in Europe and there are plans to build four additional centres in Romania and Poland.
Hungary’s investment agency, ITD Hungary, welcomed Wipro’s announcement, particularly since it could also attract other Indian firms into Europe and Hungary in particular.
Competition is one thing, but it has been revealed that a number of Indian tycoons have been lobbying European countries in order to take advantage of the IT industry’s desire to hire a workforce much cheaper than that offered by European citizens.
When we look at some of the lobbyists, it raises further questions. One of them is Nira Radia, who lobbied on behalf of big businessman Ratan Tata, the chairman of India’s largest conglomerate Tata Group. Both Radia and Tata are involved in the 2G spectrum scandal that has rocked India recently, and it was revealed that Radia had been lobbying the former Indian Minister for Telecommunications, A. Raja, for 2G allotment.
While the 2G scam is a separate affair to the controversial on-shoring, it does raise a number of questions about governments giving in to lobbying, regardless of how tempting the offers might be. It’s not hard to understand why the UK or Hungary would want Indian investment, particularly in the current economic climate – but from what we have seen so far the system can easily be abused.