May 31, 2006
India: Hot Destination for Outsourcing?
Although India always has been preferred as the major destination for outsourcing, some UK firms were hesitant to outsource their businesses because of infrastructure problems. However, in the recent months, Indian companies have resolved the issues attached with infrastructure problems to a considerable extent. Experts believe that India is in a better position to tackle the infrastructure problems that have discouraged some UK firms from outsourcing IT work to the country.
The bureaucratic tangles in India always had a negative impact on the outsourcing industry. However, increased foreign investment and efforts by the Indian government to streamline bureaucracy have opened the way for completion of infrastructure projects at a faster pace. Infrastructure facilities in the Southern Indian cities including Bangalore and Hyderabad have improved significantly. Companies such as Satyam, TCS, Infosys, Microsoft and Oracle have expanded their operations in these cities and are attracting outsourcing firms.
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However, some critics argue that despite these promised improvements, the ever-increasing demand for electricity, roads and other basic infrastructure means the Indian government will struggle to keep pace. As evidence, they point to the rolling blackouts that have occurred in some cities.
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