The Hindu Business Line : India keeps lead in offshore location race; China is second

INDIA continued to top the list of `Global IT and BPO services locations' in 2005, though issues such as wage inflation and rising competition from other low-cost contenders marginally narrowed its overall lead. Arch industry rival China, came a distant second with Malaysia close at its heels.

Global management consulting firm A.T. Kearney's annual ranking - Global Services Location Index (previously known as the Offshore Location Attractiveness Index) - has also thrown up some surprises with US' San Antonio ranking 11th amongst 40 countries evaluated, ahead of popular destinations such as Belfast (UK). Despite higher costs, the US benefited from the breadth and depth of its skill-base, and the same reflected in its ranking.

This year too, India continued to lead by a wide margin.

"The gap between India and the second-ranked country, China, is larger than the gap between the next nine countries combined. Nevertheless, India's lead has shrunk slightly compared to 2004. This is mainly due to a slight reduction in India's financial attractiveness, the result of wage inflation in India, and the emergence of new even lower-cost contenders such as Ghana and Vietnam," the study said.

China maintained its second place and partially closed the gap with India, on the back of continued improvement in its infrastructure quality and the availability of relevant people skills.

"For a growing number of Asian and Western multinationals, China remains the best choice for serving their growing operations throughout the East Asia region - the logical location for IT and back-office support and call centres, including China, and other markets like Japan, Korea, Taiwan, Hong Kong and Singapore," the study added.

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