As Indian service providers get closer to their U.S. and European customers, India's largest outsourcer, Tata Consultancy Services, has set up shop in a suburb of Cincinnati.

The company's new services delivery center will be its primary software development center for North American customers. Located in Milford, Ohio, the North America Delivery Center can accommodate up to 1,000 staff, most of whom will be hired locally, the company said on Tuesday.

A number of Indian outsourcers are setting up facilities to be in the same time zone and be physically closer to North American and European customers. Infosys, India's second largest outsourcer, and Wipro, the country's third largest outsourcer, have, for example, set up IT services and business process outsourcing operations in Monterrey, Mexico. Wipro, which last year acquired Infocrossing, an IT services provider in the U.S., is also planning a facility in Atlanta.

Indian outsourcers have to offer services delivery from multiple locations worldwide, said Siddharth Pai, a partner at outsourcing consultancy firm Technology Partners International in Houston.

TCS selected Cincinnati and the Ohio region for the new facility as it met all its criteria in terms of proximity to customers, strong talent pool and a significant economic base that includes large companies, it said. The company already has 40 offices in North America.

The investment by TCS in a facility in North America comes even as there is considerable concern in India that local outsourcers will be hit by the economic uncertainty in the U.S., including the probability of a recession. Some analysts, however, expect that a slow down in the U.S. may help Indian outsourcers.

"We believe that in the long term any recession in the U.S. will lead companies in the U.S. to look at more areas to outsource to low-cost locations," Pai said.

National Association of Software and Service Companies, a trade organization in Delhi, also remains positive about the growth of India's outsourcing industry. The industry is optimistic about achieving its target of US$60 billion in software and services exports by March 2010. In the Indian fiscal year to March 31, the industry expects export revenue of $40.3 billion, up 29 percent from export revenue in the previous year.

The IDG News Service is a Network World affiliate.

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