Goodbye America, Hello India

SILICON VALLEY (California) - In an astonishing reversal, Indian technology experts are returning home from the United States to work in India.

The reason is simple. After the dot.com bubble burst, the US software industry took a steep dive from which it has yet to recover.

Companies in California's Silicon Valley, the epicentre of the industry, have closed up shop or downsized drastically.

Expatriate engineers who are highly skilled in information technology (IT) and were lured to America to fuel the boom have been laid off.

Mr Mahesh Nagarajaiah, chief executive officer of Infobase Inc and president of the Silicon Valley Indian Professional Association (Sipa), cut his workforce from 130 to 80 and moved his company to an office one-third the size of his previous premises.

Indian technology engineers continue to be retrenched. Worse, they find precious few job vacancies in the Golden State these days.

Unemployment in California is now running at 6.9 per cent. In the IT sector, it is even higher.

In India, by contrast, a boom in the computer sector continues apace.

The country's growth rates are second only to China's. During the latter half of the 1990s, India registered a 45-per-cent growth rate in its IT industry and 54 per cent in its software sector.

Over the past three years, there has been growth of 35 per cent in the IT industry despite the bubble bursting in the US.

Indian expatriates, who only a few years ago fought to win lucrative jobs in Silicon Valley, are now heading back to more fruitful prospects at home.

Mr Vipul Goel, president and CEO of software consultants NetAppl Inc, said: 'Among those I had to lay off was a man I did not want to lose. I told him, 'Please hang on for a few months and I'll try to take you back'.

'I even said I'd pay his medical expenses.'

The man waited a month, then joined the exodus back to India. 'Within two weeks, he had got a job in New Delhi,' said Mr Goel. 'He made the right choice.' The same tale is told all over the townships of Silicon Valley, a dry flatland area that surrounds the lower basin of San Francisco Bay. There, hot sprawling townships like Redwood City, Menlo Park, Palo Alto, Sunnyvale, Santa Clara, San Jose and Fremont try to weather the dot.com downturn.

'We are not immune,' said Mr Sridar Iyengar, president of Indus Entrepreneurs, a group that fosters networking among expatriate Indian professionals. Most of these people are - or were - working in the IT sector. 'It has hurt us,' he said.

It is all so different to how it was a couple of years ago. Between 1997 and mid-2001, the valley boomed. Said Mr Nagarajaiah: 'Life was very good then.' So good that California attracted the highest number of Indians in the US. Indeed, India overtook China as the second-largest source of legal migration into the US after Mexico.

In 2000, there were 314,819 expatriate Indians in California alone, the vast majority working in the IT sector - most of them in Silicon Valley. That trend may now slow down or even be reversed if America's IT industry does not start to improve soon. Mr Nagarajaiah, 37, and Mr Goel, 40, still live the good life, own homes and drive a Mercedes car; but both also admit that times are tough. Mr Goel, who had cut his workforce in half, said: 'It's terrible. I know a lot of Indians who have gone back, even those with green cards and families here.

'They think they will return later when things get better, but that won't happen. The jobs will stay in India, especially in the technology sector where Indian skills are strong.'

He echoes the lament of many fellow compatriots when he said the fear is not that Indians are returning home, but that fewer will come to the US in the future. For the trend now is this: Instead of bringing Indians over to work in the US, companies are increasingly sending work over there for Indians to do at lower wages in IT centres such as Bangalore and Hyderabad. And the work is done less often at Indian companies and more and more at subsidiaries which the US companies themselves have set up in India for this purpose.

To run these subsidiaries, they hire Indians from Silicon Valley who have American experience - and are willing to go back to India, often at half the salary they will get in the US.

Yet they will still be materially better off. It all continues to contribute to the amazing reverse emigration of Indian professionals from California to India.