Why Companies prefer Outsourcing to India?

From the time the Portuguese explorer Vasco-da-Gama discovered the sub-continent of India, it has been a major attraction for opportunities and business. With a large population of skilled and unskilled labor combined with excellent natural resources, India poses as a great destination for outsourcing business processes. In a recent survey it was revealed that 80% of the US and European enterprises named India as their top preferential outsourcing location. In fact, the National Association of Software and Service Companies (NASSCOM)reported that more than half of the Global Fortune 500 companies outsource their IT services to India. [1]

With tech giants like Microsoft, Google, Ford Motor Company, CISCO etc., outsourcing their IT services to India,[2]The country’s outsourcing market stands at a valuation of approximately US $118 billion[3] and is expected to reach $330 billion by the end of 2020 according to NASSCOM head of research and IT expert Achyuta Ghosh, clearly dominating the space.

Read on to find out exactly why India is the favorite outsourcing destination for many.

India is a top BPO and outsourcing destination
India is a top destination for outsourcing business processes

1. India has the largest pool of technical and professional staff

In terms of workforce, India remains unbeatable with an ever-growing population of 1.3 billion people.  Around 3.1 million of which are fresh graduates every year seeking jobs in various sectors and industries. Especially for the IT sector, the abundance and easy availability of dedicated Software developers make it a preferred branch of outsourcing by companies globally.

Moreover, the technical workforce is easy to communicate with in comparison with less technologically inclined people. It is more convenient for virtual management operations thus leading to better returns.

2. Flexible Costs

Outsourcing to India saves a lot of cost for western companies and thus poses as one of the most enticing reasons for companies to choose India as their outsourcing partner. One reason for this is the difference in currency value between Rupiah and Dollar.

An average hourly cost of a Web developer in the USA is around $100-150/hour whereas the average web development in India costs just about $15-25/hour. This significant decrease saves up to 80% of the company’s operating costs.

Another reason why India helps in cost reduction is its enormous population of youth ready to work for low cost in return for international exposure and learning. Over 50% of the country’s population are millennials aka under the age of 25 years. [4]

3. High Quality standards

Another compelling reason for choosing India is the consistent high-quality services it has to offer, With high class infrastructure and technology. The National Outsourcing associating in its annual conference revealed that major companies chose India as an offshoring destination for cost cutting but stayed for the quality and speed or work.

4. Attractive Government policies

The government of India has a stable and Pro-IT policy for outsourcing. They provide tax benefits to lure the international companies, in addition to recognizing electronic contracts, strict measures against cybercrime and giving E documents a legitimate status.

India considers the Outsourcing industry as one of its top 5 priorities as it largely contributes to the GDP of the country.

5. Quickest time-to-market ratio

India and the USA have a time zone difference of 12 hours and this feature proves out to be very beneficial for companies that choose India for outsourcing. Their work is completed before hand and utilize the extra hours to market it. It is especially a benefit for the customer support and helpdesk services.

It enables round-the-clock productivity leading to effective results due to committed and hardworking professionals.

6.Minimised Language barrier

India is the second-largest English-speaking country with over 100 million people well equipped with the language, all across the country. Thus, it minimizes any language barriers that may occur in the customer support services.  It is predicted that by the end of 2020 this number will reach to about 2 Billion.

Digital tools like Slack, Skype etc. make communication with the team convenient. It has a larger English-speaking base than the US and UK combined! This fact solely is enough to remove any doubts you had about language barrier.

The Bottom Line

India is a rapidly developing country is one of the 6th largest economies of the world. Outsourcing is one of the major industries of the country, largely contributing to its GDP and growth. It lures International companies via its tremendous professional services and high-quality performance.

Outsourcing your back-office functions to India gives to more time to focus on core operations. Accounting, IT, Digital Marketing, HR and customer support are the major services outsourced to India by a Global audience.[5]

However, deciding to outsource, analyze what aspect you need to outsource and keep a strategic approach about it. Effective management and a persistent workforce lead to tremendous results for your business!


[1] https://www.outsource2india.com/why_india/why_india.asp#:~:text=India%20offers%20flexible%20pricing%20options,savings%20that%20companies%20can%20achieve.&text=This%20pricing%20flexibility%20allows%20companies,helps%20them%20reap%20large%20profits.

[2] https://www.yourteaminindia.com/blog/outsourcing-in-india/

[3] https://www.outsourcinginsight.com/benefits-outsourcing-services-india/

[4] https://www.classicinformatics.com/blog/top-10-advantages-of-outsourcing-to-india-in-2019

[5] https://www.cogneesol.com/blog/why-companies-outsource-to-india

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