Cisco to inject $1.1 billion in Indian operations

Upbeat over its decade-long operations in India, networking gear maker Cisco Systems said it will invest an additional $1.1 billion to expand its Indian operations over the next three years.

Cisco president and chief executive John Chambers, who began a thee-day visit to India Wednesday, announced the investments. The major portion of the funds, $750 million, will go toward boosting research and development activities, particularly at the company's global research-and-development center in Bangalore.

The San Jose, Calif.-based networking company said it also earmarked $150 million for enhancing leasing options available to its India customers and partners, $100 million for venture capital, and $100 million for improving technical support and opening more spare-part depots.

Cisco disclosed the investment plans after Chambers met in New Delhi with India's prim minister, Manmohan Singh, and Singh's minister for communications and information technology, Dayanidhi Maran. Chambers' last visit to India was in 2001, when he announced an investment of $250 million.

"Cisco believes that the Internet, and related technologies, will be a key enabler for India to achieve its goal of becoming a developed nation," Chambers said in a statement. "As Indian companies strive to be globally competitive, they have realized the importance of investing in information technology and networking to adapt quickly to rapidly shifting market transitions." "A year and a half ago, Cisco recognized this inflection point in the Indian market and made several strategic investments, which are paying off today," Chambers said.

Cisco, which sells routers and other network infrastructure equipment to telecommunications companies and call centers, has been one of the major beneficiaries of deregulation of the Indian telecommunications market and outsourcing boom in the last few years.

In 1995, Cisco became one of the first global firms to set up shop in India. Last December, Nokia unveiled plans for a mobile devices factory, while both Microsoft and Motorola have opened research labs in Bangalore.

[pentium4forever]

Keep jobs in U.S.

Keep jobs in U.S., enough setting up stuff in India and overseas. If only John Kerry would have won the election last fall.......

[Rusdude]

Re: John Kerry

I wish Kerry wouldn't won too, but that wouldn't have changed much. While there're differences between parties regarding social/religious issues (gay marriage, education, insurance, etc.), they're all pretty much aligned with businesses. Who do you think contributes hundreds of millions of dollars to the part coffers? Make long story short, outsourcing would still continue.

Outsourcing will probably continue because of growing globalization which will demand some degree of presense in the foreign countries. In-sourcing (moving jobs to rural areas of the US from large urban areas with their high costs of living and, hence, high wages) is an increasing trend. Although you're probably not going to like it either.

A more long-term solution is for the US to differentiate and become more high-tech, offer skills and technologies that are difficult to replicate. Yes, that might mean that most programmers, accountants, or call center people will work in China, India, or Russia. However, the more prestigious positions would remain in the US. Just think of it like textile industry -- most of the clothes is made in Asia but we're pretty used to it by now because other more rewarding jobs are available.