Why is everybody outsourcing to India?

Nov 20 00:13 2005 Mahalakshmi Prabhakaran Print This Article

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There was a time when India was a mere blip on the world map and was burdened with its reputation as a mystic land of sanyasis,Guest Posting new-age gurus, snake charmers and poverty! The 1990s announced the arrival of Globalization. With boundaries shrinking and geographies blurring, and a nascent IT revolution taking ground, India fast caught on to the booming industry. With hi-caliber talent, government support, strong infrastructure and a booming economy, India fast emerged from the veil of exoticism to become the most favored IT destination of the globe.


As stated before, you don’t have to go far to understand the factors behind the booming success of India Inc. If reports by Nasscomm (National Association of Software and Service Companies) and consultancies like Ernst & Young (E&Y), McKinsey are to be believed, India will continue to lead as the Outsourcing Destination, over competing countries including China, Ireland, Philippines, Malaysia, Israel, among others. These reports have delineated the important factors that provide fitting answers to the raging question: Why is everybody outsourcing to India?


Yes. Size matters. A country whose population has grossed the 1 billion mark, paradoxically it is this large number that has emerged as its single largest contributor to India’s success. With approximately 2.1 million graduates and 0.3 million post-graduates passing out of India's non-engineering colleges, the numbers are expected to grow to 17 million people by year 2008. As home to a qualified, English speaking and tech- savvy pool of talent, suffice it to say that the numbers are impressive and still growing…


High on Quality.  

While the size of the resource is critical, what makes the Indian workforce the best solution is the quality of service offered. Highly educated, articulate and technically versant, MNCs have a good reason to set up shop in India. What’s better is you get the high-caliber software engineers, project managers, researchers and other professionals at competitive prices.

Low on Cost.


Saving money is the main consideration for business looking to outsource to other countries. Reports say that the manpower cost in India is approximately one-tenth of what is charged overseas. With the Indian workforce providing services at lower salaries in comparison to the European or American countries, what better reason does a global MNC need to open its back office operation in India?  


Talk the Talk


Keeping the light focused on the workforce, another big advantage Indians hold is their proficiency in English. India produces the largest number of graduates every year and most of these graduates have adequate knowledge of English language. The fact that Indians can talk the talk articulately is yet another reason for India being courted by companies across the globe. Language proficiency is verily the reason why China has not emerged as the leading Outsourcing destination.


Sound Infrastructure. Albeit a developing country, India today has sound infrastructure that strengthens the country’s capability as the ideal IT/ ITES destination. Robust Telecom infrastructure, 24x7 power supply (essential requirements for running a software company) and proper connectivity with countries across the globe, assure investors that investing in India is a sound business proposition.


A friendly Government to top it all. The best thing that could have happened to India waking up to its potential as a software hub was a pro-active government that actually acted in a timely manner to boost the country’s capabilities.  Formulation and implementation of transparent and investment friendly policies like Telecom policy, The IT Act have opened up the business vista, and Have put the country on the road to greater development.


For a country whose only claim to fame was the great Indian Rope trick, gaining recognition as the hottest outsourcing hub of the world today is a proud achievement, indeed.  While everyone in the developed countries debate over it, it wouldn’t be far from the truth to state that there are many more international players vying to invest and reap the benefits.

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Mahalakshmi Prabhakaran
Mahalakshmi Prabhakaran

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