Tag Archives: offshoring destination

Why India able to retained its rank as the number one offshoring destination in the world

Based on the current report, India has retained its coveted position or rank as the number one offshoring destination in the world. Moreover, it has not only maintained its ranking but it is also increasing its lead over number-two ranked China.

UntitledThe increase is very interesting, particularly when looking at the debate which as going on around five years ago, when people were talking about the nation losing its competitive edge. Indian outsourcing is not the same today as it was fifteen or twenty years ago, it has immensely evolved and  now spans the full value chain low-end business process outsourcing to high end knowledge process outsourcing. The offshore industry begun in India and has been able to grow the BPO and IT sector to billions and capture more than the offshore outsourcing field.

The United States and Europe are the biggest clients for the Indian vendors and account for sixty percent and thirty-one percent of IT and BPO exports respectively. The biggest vertical sectors are the financial services, high-tech field, manufacturing and retail. The information technology and business process outsourcing first started in the country in the mid 80’s. The huge, English speaking, low-cost workforce was the main draw. The industry grew fast through the 90s.

The global recession in the years 2008 and 2009 has had a negative effect on the outsourcing growth of the country. However, the sector has experienced a turnaround in 2010. Most European and US organizations are still wary about the speed or staying power of the economic recovery and so are looking to maintain a low cost base in locations such as India. It has bounced back to its double digit growth.

The country is the biggest democratic country in the world and its demographics and history have positioned it well to benefit from the new global services market. Most of the subcontinent was annexed by the British East India Company during the 18th century. Although colonization had a lot of drawbacks, the act combined several previously independent nations and built the foundation for a massive national economy. The British colonization brought English to the nation which has become the business language in the world and a great advantage for India.

At present, the economy of the country is one of  the biggest emerging economies in the world. It continues to be the most preferred destination for businesses and organizations looking to offshore their information technology and back-office functions, regardless of the backlash against sourcing to the region. Moreover, it also retains its low-cost advantage and among the most financially attractive destinations when seen in combination with the business environment it provides and the availability of highly skilled professionals.

Without a doubt, it has maintained its number one position amidst the other well-established hubs dropped in their attractiveness to be replaced by new emerging destinations. The top three places remained the same, India, China and Malaysia. The outsourcing industry in the region is also expanding its reach to focus not just on companies and business from Europe and the United States, but also in other  emerging nations in East Asia as well.

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