infosys ltd. was founded in 1981 by seven Indian entrepreneurs with 10,000 rupees (about $1,000 at the time) between them. It has quickly become a symbol of the rise of a new India – high-tech and globally connected – as the first Indian company to be listed on NASDAQ and, in August 2021, the fourth to cross the bar. $100 billion in market capitalization. It was during a visit to the headquarters in Bengaluru in 2000 that Thomas Friedman of The New York Times came up with his famous phrase that “the world is flat” – that every country is now on a level playing field. And it is on this campus that a succession of foreign dignitaries – Vladimir Putin in 2004 and David Cameron in 2010 – came when they wanted to discover the new India.
Infosys continues to be a beacon child of globalization, with operations in over 50 countries and a good proportion of global companies (including Bloomberg) among its customers. Its consolidated net profits rose 12% in the last quarter of March. The company is still, in many ways, in the same line of business as when Friedman made his flat world observation – bringing Indian technological prowess to the global market at competitive prices. The majority of its approximately 260,000 employees are based in India. Arguably, the company’s core competency is its ability to turn Indian higher education products into polished professionals at a daunting pace.
Yet Infosys and its followers are increasingly battered by forces that refuse to follow the logic of the global marketplace: forces that have to do with such basic things as political passions, communal identities, and group loyalties. The world may be flat when it comes to sending electrical impulses down communication wires. But it’s decidedly piquant when it comes to all things politics.
The most recent example is the UK hubbub over Akshata Murthy, the daughter of NR Narayana Murthy, the company’s CEO from 1981 to 2002, and owner of 0.91% of the company’s shares, worth an estimated 690 million pounds ($906). million). Her marriage to Britain’s Chancellor of the Exchequer, Rishi Sunak, has recently made her a symbol of the unacceptable face of globalization. The revelation that she holds non-dom status (meaning her overseas earnings are sheltered from UK tax) has sparked an uproar over one rule for the rich and another for the rest of us.
At the same time, Infosys’ refusal to close its offices in Moscow, as companies like Oracle Corp. and Microsoft Corp. to protest against the Russian invasion of Ukraine, led to accusations that she lived on “blood money”. In both cases, the logic of politics prevailed over the logic of money. Murthy agreed to pay taxes like an ordinary British citizen, and Infosys decided to “urgently” close its Moscow office and move the office’s 100-odd staff elsewhere.
Akshata’s brother Rohan, who owns 1.43% of the company’s shares, is also embroiled in a long dispute that demonstrates the world’s upsurge. Murty (who spells his last name differently than his father) seemed to be following the path of a typical member of the global elite: he studied computer science at two elite American universities, Cornell and Harvard, and founded a technology company, Soroco, which specializes in AI and automation. But while pursuing his doctorate at Harvard, he also took courses in ancient philosophy and literature in the Sanskrit department and decided to found, with his father, a classic library Murty of India, composed of some 500 volumes, comparable to the Loeb Classical Library of Greek and Roman texts.
Producing a library of Indian classics was always going to be a controversial endeavor given the tendency of today’s Hindu nationalists to marginalize the country’s other traditions. But Murty made it more controversial by putting the series in the hands of Sheldon Pollock, a post-modernist scholar who treats Sanskrit as “the main discursive instrument of domination in pre-modern India” and points out how the writers justify the abuse of Dalits, women and Muslims. Some 130 Indian scholars and public figures have signed a petition calling for Pollock’s removal from the post of editor and, although Murty has refused to comply, Hindu activists continue to agitate against the plan.
Hindu nationalists also began to focus on Infosys itself. Gone are the days when the company could claim protection from populist fury as a symbol of national regeneration. Now members of Prime Minister Narendra Modi’s ruling Bharatiya Janata Party are increasingly treating it like another multinational tech giant like Amazon.com Inc. or IBM. The most recent sign of the change of heart is how the ruling party has reacted to the problems generated by Infosys’ upgrade of the country’s income tax portal.
The start-up issues are certainly serious, forcing the IRS to extend this year’s filing deadline from July 31 to December 31, but they are arguably on par with big tech projects around the world. The BJP treated them as an opportunity to knock Big Indian Tech down a notch or two: Finance Minister Nirmala Sitharaman twice summoned Infosys CEO Salil Parekh to her office for a fancy dress. More worryingly, a Hindu-language magazine run by members of the Rashtriya Swayamsevak Sangh movement – the militant parent organization of the BJP – published a four-page tirade in September 2021 lambasting Infosys for plotting to undermine not just the Modi government but the government. India itself. “There are allegations,” the magazine commented, “that Infosys management is deliberately trying to destabilize the economy. Could it be that anti-Indian forces are trying to harm India’s economic interests through Infosys? »
The incident shows how quickly technical issues with lines of code can escalate into culture wars over belonging and betrayal. For a growing number of Hindu nationalists, local tech companies are not national champions but enemies within: agents of a global culture determined to dissolve traditional values by allowing women to work instead of stay at home for having children (Infosys boasts that 39% of its employees are women); where people are promoted on merit rather than confined to their caste identity; and where towns are expanding at the expense of villages.
Even as it struggles against Hindu nationalism at home, Infosys is also being forced to put down deeper roots abroad. The company’s business model of commercializing Indian intelligence is being challenged by a combination of growing resistance to immigration everywhere (the company has been repeatedly accused of circumventing visa rules Americans) and a growing demand for in-person services. Infosys now sees “localization” as one of its priorities, expanding the local workforce in developed countries and China, deepening its relationships with overseas universities and technical colleges, and creating “hubs of innovation , centers close to the coast and digital design studios”.
Yet localization doesn’t just complicate a business model that was based on labor arbitrage. It also exacerbates corporate cultural issues at home. How a company that prides itself on its “One Infosys” policy recruits knowledge workers in the United States – where LGBTQ employees get family leave and trans people are addressed by the pronouns of their choice – without infuriating Hindu nationalists at home who think people should be defined not only by their biology but also by their caste?
The original founders of Infosys are now not only billionaires in their own right, but also the godfathers of the next generation of Indian technology, taking young entrepreneurs under their wings and investing in dynamic new ventures. But for all that, they and their families are no longer sheltered from the anti-globalization forces that are raging throughout the world. And the general business atmosphere in India is cooling, with private investment falling and the economy slowing even before Covid hit. It is too early to conclude that it would be impossible to repeat the extraordinary successes of the 1980s in the 2020s. But, alas, you can no longer treat the world as flat and imagine that the only problems in your path are related to technology and logistics.
More from this writer and others on Bloomberg Opinion:
How to get out of the great stagnation: Adrian Wooldridge
Why I am losing hope in India: Andy Mukherjee
Under pressure from all, India gives diplomacy a chance: Ruth Pollard
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Adrian Wooldridge is a global economics columnist for Bloomberg Opinion. He was previously a writer at The Economist. His latest book is “The Aristocracy of Talent: How Meritocracy Made the Modern World”.
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