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BANGALORE, INDIA, March 31, 2002: With 925 software firms and 80,000 software engineers, Bangalore has become the Silicon Valley of India, accounting for one quarter of the country’s $6.2 billion in software exports. Bay Area notables Cisco, Apple and Hewlett-Packard all have sites here. When the original Silicon Valley sank into recession, Indians were optimistic. With 60 percent of India’s software exports already going to the United States, analysts predicted that the slowdown would simply push US employers in the direction of more low-end offshore work. But the Sept. 11 terrorist attacks wreaked severe damage on India’s information technology business by accelerating the loss of confidence among American businesses and consumers. Analysts in India say that American IT companies panicked over the potential economic ramifications of Sept 11, suddenly withdrawing their investments in projects abroad. At the same time, budgets were trimmed at US tech firms, and many Indian H-1B visa holders returned home. By the close of 2001, according to Infotech.com, about 10,000 private tech training centers had closed, and the number of students enrolled in such institutes fell by about 30 percent. “It’s very sad,” said D Jagannath, an Internet facilitator at Wipro, one of India’s largest information technology service vendors, “Guys who were working offshore have been thrown back here; people have lost jobs, or had their salaries cut by 30 percent.” Bangalore has had some good news of late with companies like AT&T, Sun Microsystems and Cisco Systems heading up new interests here. But the area’s vulnerability to the vagaries of the US tech cycle has prompted a search for new markets and made Indian self-reliance a higher priority.

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