India Growing Concern?

International Economics

India’s Growing Concern?

In the article, “Attrition Besets India Call Centers” India has an abundance of labor due to its large population and abundance of English speaking people. Because of the abundance, India has grown to become a chief exporter of call center services to the United States. The Stolper-Samuelson Theorem states that opening trade splits a country into specific gainers and losers in the long run. Due to India early success with call centers; will the thriving demand cause India to continue its triumph due to its abundance or struggle with the unintended consequences?

One such assumption is, the country has a positive amount of two goods. In the article,”Attrition Besets India Call Centers” India has an abundance of labor due to its large population. It also has become a major exporter of services to the United States due to its solid education system with English speaking people in abundance and it relatively cheaper cost of labor than the United States.

The second assumption is that factors are mobile between sectors in the economy. In the article, “Attrition Besets India Call Centers” India is now struggling with the consequences of its own success. Due to the increasing growth of the call centers, workers that are trained are now becoming more valuable because of their training and the growing demand of the industry.

The third assumption is to have competition prevails in all markets. Due to the demand of the call centers in India; competition in this industry is growing. The turnover rate in the industry is increasing, which is driving up costs and salaries. Competition is growing in India’s call center and is expected to employ one million people in five years.

In summary, there are examples

...