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India continues to be the top outsourcing destination
India continues to be the top outsourcing destination

April 17, 2024

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In CY2023, 89% of enterprises preferred outsourcing their digital services contracts, up by around 24% from CY2022. Outsourcing has increased with a higher allocation to digital spend (despite falling tech spend). And India remains the most preferred outsourcing destination, followed by Brazil, Mexico, and the Philippines. This highlights India as a global hub for digital services. The top sectors that will be outsourced to India in 2023 are travel and transportation, telecom, media and entertainment, manufacturing, construction and engineering, energy and utilities, and hi-tech.

India is being preferred the most due to the following reasons:

  1. Favourable government policies: IT Act, 2000, to promote safe and secure outsourcing destinations. SEZs offer a conducive environment, tax incentives, encouraging foreign investments, ease of doing business, and so on.
  2. Large talent pool: in 2022-2023, India supplied 2.5 million STEM graduates (one of the world’s largest suppliers). Our emphasize on skilling and training our youth has contributed to producing a skilled workforce. Moreover, proficiency in English among Indian professionals has led to seamless communication, overcoming language barriers.
  3. High-quality services, that too at comparatively lower costs: low-cost pricing options, fewer operational expenses, and high-quality services provided by Indian firms. The cost of labour is also quite low relative to many western countries. Therefore, allowing businesses to access top-notch digital services at a fraction of the cost.
  4. IT industry of India: India enjoys a good reputation globally as a global IT hub for outsourcing. We have the requisite infrastructure with technology parks and business incubators present across the country, capable of delivering good-quality services. Thus, a credible destination.

With its large pool of talent, cost effectiveness, robust infrastructure and favourable business environment, India continues to maintain its leadership position in outsourcing industry and drive innovation in this digital age.

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