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Outsourcing Market In India

Jul 2, 2008
Businesses all over the world have seen the benefits of outsourcing. They have now realized that outsourcing is not just an option for survival but a tool that when used properly, will greatly benefit their businesses. And with India showing much talent and skills, it has become the favorite place of these businesses as an outsourcing destination.

India's Outsourcing Revenue
India has revenues of US$10.9 billion from offshore outsourcing and US$30 billion from IT and total outsourcing (expected in FY 2008). India thus has some 5-6% share of the total Outsourcing Industry, but a commanding 63% share of the offshore component.

Major Outsourcing Cities
A joint study carried out by Cyber Media's Global Services magazine and investment advisory firm Tholons has drawn up a list of 'Top 50 Emerging Outsourcing Cities' and India is represented with six cities including Coimbatore (21st) while China has five cities.The Philippines city of Cebu (4th), Vietnamese city of Ho Chi Minh (6th), Colombo (7th), Shanghai (8th) and Beijing (10th) have also found a place in the top-10 chart.

Why India
Productivity and growth can somewhat be called the teaser benefits of outsourcing and the country at the number one spot that provides these two is India. All over the United States and the United Kingdom, India is the preferred destination for outsourcing assignments. In recent researches, forty four percent of the world's offshore outsourcing back office and software services are in India. It has also been noted that as many as 400 of the Fortune 500 companies have their own branches in India or are outsourcing to India utilizing Indian technology companies.

What makes India such a hot spot for outsourcing jobs?

1. Skilled Labor - India has a myriad of skilled people that are very available in the country. The highly skilled work force in India provides not only high quality service but also other added services that are very valuable. An added advantage, which puts India on top of the list, is the ability of the people to speak in English. It boasts of being the 2nd largest nation to have the most number of English speaking citizens thus companies based in the United States or the United Kingdom opt for outsourcing in India.

2. Huge Labor Force - Because of this vast number, India can afford to trim down the cost of services without having to cut down on quality. Just by looking at the list of companies that have back office operations in India one will truly understand and believe this. Airlines such as Lufthansa and British Airways outsource their ticket reservation in India. HSBC and GE outsource accounting in India. Dell and Microsoft outsource research work in India. Standard Chartered has its full back office operations for its global business in India.

3. Government Support - Another reason why India is an outsourcing hot spot is because of its government policies. Because of the support it gives to the outsourcing industry in the country, the government and its policies have ensured the growth of outsourcing in India. As of today, its value as an outsourcing destination has reached high status.

4. Stable Democracy - The stable democracy that India has been experiencing for the last six decades gives India an advantage in the outsourcing industry. The country's GDP rate of 9.2 percent, ever improving infrastructure and its status as a country that provides high quality of service, and rapidly developing technology makes it a hot spot destination for outsourcing.

5. Global Recognitions - Five Indian cities are among the top 10 global emerging outsourcing destinations with Chennai topping the list. Among the top 10 cities, Hyderabad is ranked at the second position followed by Pune (3rd), Kolkata (5th) and Chandigarh (9th).
About the Author
Paul Hata is active in various social and community programs aimed at providing equal access to education,health and jobs to all.Paul has over 10 years experience in managing a multi-million dollar advertising company.Paul can be reached at - TradePlanets.com
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