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"India is the land of dreams and romance, of fabulous wealth.... cradle of the human race, birthplace of human speech, mother of history, grandmother of legend, great-grandmother of tradition.... Our most valuable and most instructive materials in the history of man are treasured up in India only...."       

                                                                                              ...Mark Twain


Over the past decade, India has emerged as the favourite destination for international companies wishing to outsource their IT needs. In the past few years, India has become the hub of IT-Enabled Services with many Fortune 500 companies outsourcing their customer care and BPO centers to either third party companies based in India or setting up a captive center. Now these international companies are outsourcing engineering services to Indian companies thus providing them with opportunities to move up the value chain.

Some important reasons for India's emerging dominance in this field are: -


Proactive Government

The focus of the ministry of Information Technology is on development of globally competitive quality manpower in Electronics, Information Technology, and Telecommunications. Recognizing the growing importance of the IT- Enabled Services sector, the Government of India has introduced various policy concessions and initiatives to accelerate the growth of the market. The Indian software and services industry, spearheaded by associations such as Nasscom (National Association of Software and Services Companies - India)  has also taken various steps to ensure that India becomes the global hub for IT-Enabled Services outsourcing in the future.


High Quality of Education

The Indian education system places strong emphasis on mathematics and science, resulting in a large number of science and engineering graduates. Mastery over quantitative concepts coupled with English proficiency has resulted in a skill set that has enabled the country to take advantage of the current international demand for remote development and IT outsourcing.

India has some of the best engineering colleges in the world, with the IIT’s being the premier institutions amongst them.

The government of India has taken steps in the field of education to ensure that India is geared to fulfilling its potential of becoming the IT & ITES hub of the world.

Some of these steps are:

Upgradation of quality of education in existing institutions,

Identification of gap areas and developing specialized programs, and

Introduction of new educational technologies

Out of the population of over 1 billion people, 300 million speak English fluently and are skilled in various fields. The country's English speaking manpower rates high in areas such as qualifications, capabilities, quality of work and work ethics. This places India ahead of competitors.

At any given point, about 6 million people are enrolled in the country’s 200 universities, 5000 colleges, and 100, 000 secondary schools (approx.).


Vast pool of engineering talent

India has an enormous talent pool of highly qualified and trained scientists, engineers and technicians. Indian engineers have proven their capabilities worldwide in all industries notably design engineering, research and development and software services. The high quality of Indian engineering has been freely acknowledged by international companies and contractors working in India as also by the large number of companies elsewhere in the world utilizing services of Indian engineers.


Higher Productivity

India’s manpower is attractive to international companies also because of its higher productivity. The reasons for the higher productivity are

More working hours - Indian companies usually work six nine-hour days as compared to five eight-hour days abroad. This contributes to about 35% more work being done during the week by the Indian manpower as compared to their international brethren.

Higher Output - In certain IT-Enabled Services, reports have shown that Indian centers have achieved higher productivity levels-for example, the number of transactions per hour for back office processing, than their Western counterparts.

Lower turnover of employees - IT Enabled Service companies are not only paying its employees more than the average salaries but are giving them a world-class environment to work in wherein all their daily errands (payment of bills, personal travel etc) are taken care of by the company’s HR department. This leads to higher motivation , dedication and satisfaction resulting in a low turnover of employees thus increasing the productivity of the company and also saving in terms of training new staff members.


State-of-the-art infrastructure

The infrastructure requirements that are needed by India to become the hub of services exist.

a) India’s telecom and internet infrastructure has nearly approached parity with those of the western countries.

b) The Indian central and state governments have set up many Software Technology Parks around the country that house IT and ITES services companies.


24x7 service

India is able to offer a 24x7 service and reduction in turnaround times by leveraging time zone differences. India's unique geographic positioning makes this possible. Indian IT-enabled companies work in three shifts providing you with round the clock operations. For example, due to the average 12 hour time difference between India and North America, Indian offices work while those in N. America are closed and vice-versa—this has the effect of continuous working cycle and output.


Quality of service

Indian companies have earned the reputation of providing their international customers with good quality service because of its educated, skilled and talented manpower, along with their dedication achieving highest quality standards. Indian companies have unique capabilities and systems for setting, measuring and monitoring quality targets. Companies embracing high quality standards such as Six Sigma have discovered that certain countries, notably India, offer a work force culturally better suited to complying with the rigors of quality process. As of 31st March 2002, India had 42 companies at SEI CMM Level 5 assessment.


Reduced Costs

Indian companies are not only able to provide world-class quality solutions to you round the clock, they are able to provide them to you at a very competitive rate due to the lower salary standards in India. According to, a typical Cad Drafter working in California -- Los Angeles earns a median total compensation including benefits of $53,240. The cost of an Indian CAD Drafter working in India would be about $ 12,000.     


Advantage India

According to the NASSCOM (National Association of Software and Service Companies – India ) McKinsey report, the IT-enabled services industry will employ over a million people in 2008 and the revenue potential is of about 17 billion US dollars. The growth of IT-enabled services in India has risen from 0.8 billion US dollars in 1999-2000 to 1.5 billion US dollars in 2001-2002.

Tech researcher Gartner recently forecasted that more than 80 percent of multinational companies will use IT outsourcing to save money, overcome skills shortage, and increase flexibility, with most of this working heading towards India.


A comparison amongst some countries in Asia Pacific based on these factors highlights the following:

1 denotes low; 2 denotes average; 3 denotes high

Source: McKinsey & Co.


See also: -    Companies in India


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