All MNC captive units in the country are not shutting shops to flee high-cost Indian cities but are surviving it with efficient business measures, according to consulting and research company Zinnov Consulting.

In its latest study, Zinnov said 25-30% of the smaller captives ? with revenue less than $100 million ? had adopted India-centric measures focused on personnel and communication practices and are stressing on long-term goals to live through a raging growth in salary, attrition and infrastructure costs here.

The exit of American computer maker Apple in 2006 had raised a debate that MNC captives would continue to quit India. ?Contrary to what is believed, a good number of small captives have actually lived through the cost crisis and have not shut down operations,? Chandramouli, engagement manager at Zinnov, told FE.

India hosted over 430 captive MNC units, mostly dealing with enterprise and semi-conductor products. Zinnov says 49% of the players are sub-$100 million, of which 85 have a team size of 10-50. About 6% of the captive pool reported revenue of $100-200 million, while 70 companies were larger players recording revenue of over $500 million. For successful companies, while India?s people-costs ? primarily salaries and attrition and comprising 50% of the total operational costs ? were increasing at a rate of 16% per annum, the total cost of running an India centre was rising only at a rate of 8%. Among the 409 units surveyed, attrition rates, earlier at 14-16%, were down by 3-4% for those who had successfully beat rising costs.

People costs were being controlled by higher preference for fresh recruits, hiring from tier-II locations and lateral hiring of IT engineers. Companies had moved into facilities in city outskirts to control facility costs that constituted 25% of the total costs. Local leadership increasingly replaced expatriate movement and Indian teams were being given better ownership and accountability for projects, Zinnov observed.

Bangalore housed 55% of the total MNC captives in India with 232 units based in the city. Hyderabad and Chennai were the other two popular Indian locations for captive offshore units.