A Mexican wave

Infosys Technologies Ltd on Thursday said it was opening a 200-seat BPO facility in Mexico. It could look at other services later. This comes a few weeks after Tata Consultancy Services Ltd opened a 500-seat BPO in Mexico at the end of May. Both companies say they are investing in Mexico because they want to be close to the US.

These new investments come at a time when the outsourcing majors are also putting cash on the table to buy global outsourcing firms. Wipro Ltd paid $600 million to buy Infocrossing, a US company, on 6 August.

The usual reason trotted out is that Indian companies need to be closer to their customers. While India will continue to be the main place of work for a long time to come, it seems that wage inflation and exchange rate movements here are altering the economics of labour arbitrage.

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