Brief: India Survived The Bangalore Strike, Will Face More Tests

Last week also brought TV documentary about data losses and a court case over stolen intellectual property
India's IT outsourcing industry passed one test last week. More are on the way.

The country's tech hub, Bangalore, was effectively shut down by a public-sector strike, forcing major outsourcers including Tata Consultancy Services and Wipro to close shop and send staff home. Outsourcers shifted time-critical work to backup centers in other cities and planned Saturday shifts to make up for lost time. There were no reports of major disruptions to customer work during the strike, staged to call attention to a border dispute.

Strikes are far from the industry's only challenge.

U.K. broadcaster Channel 4 touted a documentary late last week that claims consumer data theft is rampant in India's call-center outsourcing industry. That's turning up the pressure for amendments to India's IT Act to make companies more accountable for data disclosure by their employees, such as making outsourcers compensate identity-theft victims.

Also last week, a trial was set to begin to determine whether an employee of an Indian software company, Geometric Software Solutions, tried to sell the source code of its U.S. partner, CAD software maker SolidWorks.

India's prime minister, Manmohan Singh, predicts outsourcing will create 10 million Indian jobs in the next five years. The country's reputation is key to its success in this area. Indian outsourcers reacted well to the strike crisis, but they can't afford to wave away the other concerns.