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2 India's IT edge eroded by
terror and crime By Sudha
Ramachandran
BANGALORE - Are India and its
software hub, Bangalore, in danger of losing their
competitive edge because of the rising costs of
operating here?
India's large pool of
technically skilled, English-speaking manpower and
low operating costs have made the country an
attractive location for multinational companies,
especially in the information-technology and
IT-enabled-services sectors.
But this
might be changing, warn analysts. With the IT
sector increasingly figuring on the agenda of
terrorists and a range of
other
threats to employees and data safety emerging,
there is a growing concern that the cost of
stepping up security could erode India's cost
advantage.
Unease over the issue, which
has been rising over the past couple of years, has
spiked in recent months as evidence of possible
terror threats to Bangalore has emerged.
Two weeks ago, a suspected Kashmiri
militant was arrested in a Bangalore suburb.
According to police, he was carrying arms and
ammunition, a satellite phone, SIM (subscriber
identity module) cards and a map of the city with
markings indicating the locations of the airport
and the offices of IT majors Wipro Technologies
Ltd and Infosys Technologies.
This is
not the first time that Bangalore and its IT sector have
appeared on the terrorist radar. Intelligence
agencies have been warning of possible attacks on
IT companies since 2004. Interrogation of arrested
terrorists had revealed that Bangalore was a
target. In December 2005, an armed attack on the
Indian Institute of Science, a premier
scientific-research institution, confirmed that
the city was indeed vulnerable to terrorism.
Investigations and search operations that followed
the attack indicated the existence of sleeper
cells and a terror network in several towns in
Karnataka state.
Then last July, a
software engineer - reportedly a former employee
at Oracle India in Mysore, a town 145 kilometers
from Bangalore and an emerging software hub - was
taken into custody for alleged involvement in the
serial bomb blasts on suburban trains in Mumbai.
In October, two men with suspected links to the
Pakistan-backed al-Badr were arrested in Mysore.
Indian authorities have been saying that
the IT sector is vulnerable to attacks as such
terrorist outfits as the Lashkar-e-Toiba are keen
to undermine India's growing economic might and
international profile. Indian IT giants such as
Wipro and Infosys have been identified as likely
targets. No multinational company has yet been
identified as a likely terrorist target.
However, multinational companies seem to
be no less vulnerable. The US State Department
issued alerts in 2005 and 2006 warning its
citizens of possible attacks on US interests in
Delhi, Mumbai, Kolkata and Hyderabad.
Indian intelligence agencies have been
warning that in the context of growing ties
between India and the United States, the
possibility of jihadis attacking US interests in
India is growing. "The US Embassy and consulates
in India are fortresses. It would be far easier to
strike a multinational company. Such an attack
would accomplish multiple objectives - hit the
Americans, the Indian economy and India's ties
with the US," an Intelligence Bureau official told
Asia Times Online in October.
Besides the
threat of terror, data theft is another problem
that IT and business process outsourcing (BPO)
companies are having to counter. In 2005, present
and former employees of Mphasis, an Indian
back-office service provider, were found to be
defrauding Citibank customers in New York of more
than US$350,000. Last June, Nadeem Kashmiri, an
employee of HSBC who was alleged to be part of the
Lashkar-e-Toiba network, was arrested in Bangalore
for alleged Internet fraud.
And then in November, corporate India found
itself staring at another problem after the kidnapping
of the three-year-old son of Naresh Gupta,
chief executive officer of Adobe India. The
child's abduction took place just outside his home in
Noida's Sector 15, a well-off and "secure"
neighborhood.
Tens of thousands of
children and adults are abducted for ransom every
year in India, many of them in the states of Bihar
and Uttar Pradesh, where kidnapping is a
flourishing industry. Most of these kidnappings go
unreported and unnoticed.
This was not the case with
three-year-old Anant Gupta. His kidnapping caught the
attention of the media and corporate India.
Noida, which is in Uttar Pradesh, skirts
India's capital, New Delhi. It is among the
country's most affluent districts, being home to
some of the largest software and BPO companies.
And it has attracted criminals from Uttar
Pradesh's badlands in droves. Last year there were
15 shootings in Noida. While the crime situation
in Bangalore is nowhere near as bad as it is in
Noida, the crime rate here is rising, with IT and
BPO employees increasingly being targeted by
criminal elements.
Intelligence sources
say the threat of terrorism is scaring
multinational companies. But security and
risk-management
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