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IBM To Invest $6 Billion In India To Increase Offshore IT Services Offerings

IBM said Tuesday that it will triple its current level of investment in India over the next three years, bringing its total spending in the country during the period to $6 billion. The plan aims to vastly increase the range of IBM's offshore computer services offerings. Those services are designed to help businesses cut costs, but critics say they also threaten U.S. tech jobs.

In a sign of IBM's no holds barred approach to India, CEO Sam Palmisano personally announced the plan in the IT hub of Bangalore as he spoke to a group that included Wall Street financial analysts, 10,000 IBM employees, and Indian president Dr. A.P.J. Abdul Kalam.

"If you are not here in India, making the right investments and finding and developing the best employees and business partners, then you won't be able to combine the skills and expertise here with skills and expertise from around the world, in ways that can help our clients be successful," said Palmisano. "I'm here today to say that IBM is not going to miss this opportunity."

The announcement comes on the heels of a plan IBM unveiled in March, under which the company is moving all development of business solutions based on service-oriented architectures to Bangalore.

U.S. labor advocates charge that Western tech companies like IBM overstate the business benefits offered by India and that their recent hiring binge in the country is motivated mostly by the desire to slash salaries. Programmers in India are typically paid anywhere from 40% to 80% less than their U.S. counterparts, though salaries in the country are on the rise as more companies compete for staff. Among others, Dell, Hewlett Packard, and Computer Sciences Corporation are also significantly boosting hiring in India.

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