When Biju Mathew came to the U.S. along with his wife and three kids from Kerala, India in 2000, he was distressed with a familiar problem that many parents face here-finding good tutors for their children. “I had tutors for my kids back in India. There was a dearth of tutors here,” Mathew says. As an old adage goes- ‘necessity is the mother of all inventions’ and true to it, unable to find quality tutors, he founded Growing Stars, a Fremont, CA based online tutoring company that tutors American students with the help of teachers located 9000 miles away in Cochin, the capital of the southern Indian state of Kerala.

Today the company with 50 teachers in India and some 400 students in the U.S. is part of a new wave of BPO- e-tuitions or online tutoring and India is in the lime light as most of the e-tuitions happen from India or to be precise, small towns that dot the country’s highways. If cheap, skilled labor, and intelligent techies brought technology work to India, it’s the ingenious teachers in India who are snatching western tutors’ jobs. Blame it on high dropout rates and unwillingness on the part of people to take up low paying teaching jobs in the U.S. that has prompted Growing Stars and two other tutor firms- Tutor Vista and Career Launcher-both based in India- to go online. “Heavy dropout rates are a concern in the U.S.,” says K. Ganesh, the CEO of Tutor Vista. Added to the dropout rates are other concerns that make e-tuition from India a probability and possibility-expensive teachers. Teachers in the U.S. have become scarce and expensive and “this is leading to a teacher-student ratio of 1:30 when the ideal set up should be 1:20,” Ganesh says. This leads to an imbalance in studies.

As a drastic measure, parents here, with a need for personalized education, have started hiring tutoring companies like these to make up for the loss in schools. Hiring them isn’t’ just cost effective, they are as close to one-to-one teaching as one would experience in classrooms. “The best part is the student never tires of learning online. The teaching is as effective as one would expect in a classroom,” says Ganesh. “Three things that make online tutoring exciting is a live tutor, content and technology to make education effortless.” “Virtual whiteboard and shared resources on the Internet makes it an interesting business,” says Anirudh Phadke, Prinicipal Consultant, e learning, Career Launcher, a New Delhi, India based e-tutoring company.

As U.S. does not have a single countrywide curriculum unlike the U.K. or India, and education is a state priority, content, mostly Mathematics, English and Science are generated in house by these e-tutorials. Poor Mathematics, English and Science skills among U.S. teachers- a fact endorsed by Phadke. “Indian teachers have the inbuilt affinity to mathematics and science,” Phadke adds. According to a survey, 40 percent of seventh graders in the U.S. flunk in Mathematics and English subject exams and this has resulted in huge demands for online tutors.

It’s not just cost arbitrage or skills of the Indian teachers that has fuelled the e-tutorial business. This business received a boost in 2001 when the Bush administration passed the NCLB Act (No Child Left Behind Act) that aims to improve the grades of the American student. The government aims to fund students to the tune of $1200 per student per annum. However the schools associated with NCLB programs have contracted none of these Indian companies.