The Hindu Business Line : India retains top offshoring slot: Gartner

Mumbai, Dec. 11 India continues to be the undisputed leader in offshore services owing to government support, English language capabilities and low cost of doing business.

However, China, Russia, Brazil and eastern European countries are increasingly providing credible alternatives, according to a recent research from Gartner Inc.

India accounts for about 65-70 per cent of the global offshoring pie.

It tops the list of 30 countries on criteria such as language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

“The Indian Government has been available to listen to the needs of the burgeoning IT industry. The voice and visibility that industry bodies such as Nasscom enjoy at the government level is rarely seen in other offshore destinations,” Mr Partha Iyengar, Vice-President and Head of Research-India, Gartner, told Business Line.

Rivals’ threat

Countries in Eastern Europe pose a threat to India’s supremacy, because of cultural and geographical proximity to Western Europe. “Western European firms are more risk averse than their American counterparts when it comes to outsourcing. They prefer near shoring most of the outsourcable work, thereby creating opportunities for IT firms having base in Eastern Europe,” added Mr Iyengar.

Even though China continues to be positioned as the greatest challenger to India in terms of its potential scale, it fared poorly for English language skills and availability of skilled middle management personnel, he said.

2008 forecasts

In 2008, Gartner predicts offshore spending to grow 60 per cent in Europe, and 40 per cent in the US.

In the Americas, Canada led the rating in seven of the ten categories, faring the worst for cost of labour.

The political and economic environment remains a concern for many companies when moving work to offshore locations such as Pakistan, the Philippines, Sri Lanka and Vietnam.

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