I believe many of us in the investment world (public, private and VC) continue to summarily underestimate the amount of innovation and intellectual capital being put to work in India. Over the last few months, I've had several conversations with people that have actually been over to India and, to a man (or woman as the case may be), they came back overwhelmed.
On the public side, I think we're keenly focused on the impact of the big IT outsourcing shops (Cognizant, Tata, Wipro, et al...), but there's a lot more going on there besides low cost blocking and tackling.
One of the more interesting conversations I had at SAP Sapphire was regarding the Indian startup market, where Lisa Reeves (head of SAP Ventures) had just come back from a trip.
SAP Ventures is looking abroad for innovation, in new markets like India. Lisa Reeves is just one of many VCs I've talked to who espouse the broad opportunities and innovation taking place in India right now. Lisa painted a picture of energetic, focused startups generating $4-$5mm in revenues PROFITABLY out of the gates. She also pointed to India's importance to SAP, as it's the 3rd largest developer community within SAP (behind the U.S. and Germany). Vinnie Mirchandani has also taken several trips there in recent months and he echoed Lisa's enthusiasm. Both contend there's a tireless work ethic pervasive there that, sadly, is no longer indicative of American corporate culture on the whole.
Today, Matt Marshall at SiliconBeat gives a quick lay of the land regarding VC efforts in India. This is something we all need to pay more attention to. It's not just about developers over there working for 1/3 of the cost, it's a young, vibrant workforce with an above average science and technical capability; and apparently no shortage of work ethic and ambition.
I've never been to India, but would certainly like to go there sometime soon to see these developments with my own eyes. In the meantime, I would love to hear from those who have been over there recently and some of the anecdotal tales of innovation taking place.