Paramilitary guards India's IT industry

[Ruag]

India beefs up security of its huge IT industry by providing troops​

India beefs up security of its huge IT industry by providing troops

When Infosys Technologies, India's second-largest IT firm, hired paramilitary troops to protect its sprawling headquarters in Bangalore, some observers might have thought they had gone overboard.

But since the Mumbai attacks last year, India's software exporters have bolstered security fearing that militants might target them as symbols of the country's economic success and to deter foreign investors.

Foremost among those seeking to hire well-armed paramilitary troops are companies in India's Silicon Valley, Bangalore, the nerve centre of the nation's $60 billion outsourcing industry that runs services from software coding to managing computer networks and call centers.

"India's IT firms are the flag-bearers of the country's thriving knowledge economy. This makes them 'high economic-value' targets with a global identity," said Manoj Vohra, director of research at the Economist Intelligence Unit's India division.

Nasdaq-listed Infosys Technologies last month became the first private-sector firm to get the elite Central Industrial Security Force, a government trained paramilitary force, to guard its swanky Bangalore premises, which has about 20,000 staff.

"Clearly, even a minor incident at these firms can have an impact on their business and, therefore, the Indian economy," said Apurva Shah, head of research at brokerage Prabhudas Lilladher.

Corporate jitters will more than double the market for electronic security systems from about $400 million a year, analysts estimate, and keep busy the more than 5,000 private security firms staffed by poorly trained guards usually not allowed to carry arms.

But it's money well-spent, said Shah, as it will be viewed favourably by shareholders and investors, and is not significant enough to dent India's competitive edge over other markets.

India this year raised its defence budget to about $30 billion to modernise its weapons, overhaul its security forces and boost border security. But that figure is still less than half of China's defence spending.

Despite extensive media coverage of the three-day rampage, the Mumbai attacks failed to dampen foreign investment, which is likely to rise by an annual 6% to reach about $40 billion in the year until March 2010, according to government estimates.

"Security is a bigger concern now, but it's not yet at a point where it's a big deterrent to investors in India," said Ajai Sahni, executive director at the Institute for Conflict Management in New Delhi.

Take that terrorists!