August 29, 2006
India marches on with its offshore cost advantage
If you have been following the outsourcing trend in India, you would have definitely felt the gathering storms over India's potency as the leading outsourcing destination. These storm clouds mainly stemmed from the fact that the mushrooming of outsourcing vendors in India directly contributed to major wage inflation in the country, and there was also a perception emerging that the pool of skilled resources in India was drying up.
However, US-based research firm Everest has conclusively dispelled all these storm clouds. In its "2006 Global Sourcing Market Update", Everest clarifies that the concerns related to wage inflation and skill shortages were grossly exaggerated, and India continues to enjoy its offshore advantages.
Maneuvering firmly on its tracks, the Indian BPO industry accounts for half of the global business in this arena, and Nasscom has predicted that the industry will chart a growth rate of 40% over the next fiscal year:
The Indian BPO sector is expected to maintain the current export momentum and grow by 35-40 per cent in this fiscal (FY 07) to achieve $8-8.5 billion as against $6.3 billion in the previous fiscal (2005-06).
Industry analysts feel that India will hold its offshore advantages and continue to rake in the outsourcing bucks for the next thirty years. It's certainly "Advantage India"!
Investor Ideas has more information on the current scenario and the future directions that the market could take.
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