The Economic Times daily newspaper is available online now.

    GSK mulls tech captive in India, may reduce outsourcing to Indian IT

    Synopsis

    GSK, which outsources technology services to Indian IT companies such as Tata Consultancy Services and Infosys and others, is looking to focus on insourcing technology development and services, said one of the two sources familiar with the development.

    GSK


    GSK confirmed to ET that it had expansion plans in technology and R&D in India, without elaborating.

    British pharmaceuticals and vaccines maker GSK is planning to set up a technology development and support centre in India with about 2,000 employees to start with, sources aware of the matter told ET, potentially cutting back on outsourcing to Indian IT services providers.

    GSK, which outsources technology services to Indian IT companies such as Tata Consultancy Services and Infosys and others, is looking to focus on insourcing technology development and services, said one of the two sources familiar with the development.

    “This could mean a reduction in outsourcing to the Indian IT companies. They are creating their own in-house technology teams as they have access to talent here,” the person, who did not wish to be named, said.

    GSK confirmed to ET that it had expansion plans in technology and R&D in India, without elaborating.

    “As part of plans laid out in February (2020) to ensure GSK is future ready, over the next two years we are modernising, building new capabilities and making our costs more competitive. One initiative will expand our existing global business operations in India,” a GSK spokesperson said in an email, adding the company would share more details once the proposals are final.

    Infosys declined to comment, while TCS did not respond to an email citing the silent period before its quarterly results announcement.

    GSK has global business operations in many countries, including India, which partner with its business units worldwide. These include technology, human resources, finance and research and development, according to the company. GSK has a manufacturing facility at Nashik, Maharashtra, and sales hubs across India, as well as a research and development centre in Bengaluru.

    Pharmaceutical companies such as Novartis and AstraZeneca have technology development centres in India, and analysts said access to skills at low cost in the country has become more important to them than just cost effectiveness.

    India has nearly 1,300 captives, or global in-house centres, of multinational companies, with most in technology development and support centres.

    These technology development centres together employ nearly 1 million of the total 4.3 million people employed by India’s IT-Business Process Management industry.

    In the last few years, many global firms have either expanded their centres or set up new development centres in India, as companies increasingly invest in digital technologies to improve their business metrics.


    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
    The Economic Times

    Stories you might be interested in