What are the advantages of outsourcing to India?

"Certainly cost reduction, but it's not as simple as that! Cost reduction was only part of the reason that companies were considering offshore outsourcing, there were benefits to be had in time-to-market and quality, leading to an adage that companies initially chose India to save costs but stayed for the speed and quality!"
- National Outsourcing Association (NOA)

According to a report on offshore outsourcing by Deloitte (December 2003), India is the dominant player in the outsourcing market catering to diverse business requirements. Outsourcing to India provides the core benefits of technological agility, quality, flexibility, cost control and, time-to-market and competitive advantages. In addition, the language and cultural barriers faced while outsourcing to other countries is non-existent as Indians are proficient in English language skills and inter-cultural understanding.

The advantages of outsourcing to India can be summed up below:

India is a talent-rich country: With the basic education system geared toward mathematics and science at early levels, Indians possess rich technical expertise. In addition, India also has a large number of educational and training institutes of international repute, offering some of the best programs in the world. The presence of renowned technical and business schools in India ensures the availability of professionals proficient in diverse domains.

Proficiency in the English language: As a direct result of the century long British colonial rule in India and the current education system being based on British standards, Indians are proficient in the English language. The lingua franca of the world, English is also the business language of India. Furthermore, all government documents and reports including the National Budget are prepared in English. India alone produces 2 million English-speaking college graduates and 300,000 post-graduates annually

Information Technology is a top priority for the Government of India: The Indian government has established a National IT Task Force to promote IT in the country. In addition, a separate Ministry of Information Technology was set up to expedite swift approval and implementation of IT projects and to streamline the regulatory process. Some of the measures taken by the Indian government include:

The Information Technology Act of 2000 (an Information Technology Bill passed in the Indian Parliament in May 2000) which brings E-commerce within the purview of law and accords stringent punishments to "cyber criminals". With this, India joins a select band of 12 nations that have cyber laws.

Software Technology Parks of India (established in 1990) offer state of the art infrastructure and various fiscal incentives and concessions to encourage foreign investment and promote software development in India.

India has state-of-the-art technologies for total solutions: Offshore assignments have moved up the value chain - from data entry to large and complex turnkey projects of 200 to 300 person years. A study by the Export-Import bank of Japan cites India as having excellent investment potential and expected to grow in the next 10-year period. A convergent network has been created by the intertwining of the ISP, Telecom, VSAT, Cellular and networking sectors. In addition, India's large business houses and Public Sector Units are working towards creating greater bandwidth availability.

Expertise in International Processes and Systems: Indian professionals have cultivated expertise in global methodologies owing to the large software exports (95 countries around the world) and the phenomenal growth of the BPO sector in India. In addition, the presence of large global corporations (in diverse fields ranging from IT, hospitality, manufacturing, finance, education to healthcare) such as Microsoft, GE, Dell, etc have enriched and augmented Indian skill sets, thereby providing Indian professionals with a global outlook and expertise in diverse domains and international methodologies and processes.

Adherence to International Standards of Quality: India joined the International Monetary Fund (IMF) on December 27, 1945. In addition, India is a subscriber to the Special Data Dissemination Standard of the IMF. Indian organizations value the ISO certifications. To safeguard Intellectual Property Rights, India became a member of the General Agreement for Tariffs and Trade (GATT) and, Trade-Related aspects of Intellectual Property Rights (TRIPS). India is a member of both the Berne and the Universal Copyright Conventions. Of the 23 software companies in the world that have achieved the prestigious SEI-CMM Level 5, 15 of them are Indian. India also has a high number of ISO-9000 software companies in the world (soon to be the highest, according to different news and industry reports)

Strong understanding of international affairs and diverse cultures: Since itself India is a large diverse country; Indians are adept at working with people from diverse cultures and backgrounds. In addition, Indians in general keep abreast of international news and events through international media including CNN, BBC World Service, The Wall Street Journal, Time magazine, The Economist, and several other international news journals (available in India through print media, television and the internet). In addition, Indians (usually being multilingual) are skilled in learning different languages and as such some of the international languages Indians are proficient in besides English include: French, German, Spanish, Italian, Russian, Arabic and Japanese.

Memberships in International and Regional Associations: In order to build an atmosphere of peace, goodwill and harmony as well as to promote international business, India is a member of prestigious international and regional associations including The United Nations (UN), The International Monetary Fund (IMF), The World Bank, The World Trade Organization (WTO), The Association of South East Asian Nations (ASEAN), The South Asian Association for Regional Cooperation (SAARC). India also maintains free trade agreements with different countries.

Trade Promotion and Business Advisory Councils: Export Promotion Councils (EPCs) have been set up for the purpose of promotion and development of exports from India. EPCs are non-profit organizations providing information and assistance to their members in order to boost exports. At present there are 19 EPCs and 9 Commodity Boards in India. The Indian Trade Promotion Organization (ITPO), a multi-product and non-sectoral service organization, helps in export promotion efforts mainly through trade fairs and other export development programs in comparatively less explored markets. In addition, Industry Associations such as ASSOCHAM, FICCI, CII and FIEO at the national level, and industry specific organizations assist members in export promotion. In addition, several countries seek to forge business alliances with India recognizing India as a both growing market in terms of service provider and consumer. For instance, the U.S.-India Business Council established in 1975 by the governments of India and the United States, is the principal U.S. industry voice promoting policy change to deepen and strengthen bilateral commercial ties between the two countries.

India offers a stable democracy and economic growth: India has been a stable parliamentary democracy since independence in 1947 and is one of the world's 10 fastest-growing economies. The Indian service sector contributes a massive 51 per cent to India's GDP. Within this category, the most promising is Information Technology development, which grew at an amazing rate of 40-50 per cent every year during the 1990s.