Outsourcing to India: All about this Raging Trend

“Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower-cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation.” – popular American radio commentator, Larry Elder

Undoubtedly, the biggest reason why numerous multinational corporations initially chose India to outsource their business operations was reduced overhead costs and increased profits. It was much later that their interest in outsourcing to India grew because of the widespread availability of skilled workforce and many other benefits.

Every organization needs to invest in a skilled team to successfully complete important projects and tasks, and eventually, grow. By outsourcing services in India, budding businesses could streamline their workflow and excel in the competition on the global arena – all within their budget.

Today, India has become a global outsourcing hub, especially in three major areas that are software outsourcing, infrastructure and technology outsourcing (ITO) and Business Process Outsourcing (BPO). All thanks to the quality and cost-competitive innovation that it offers, this country has earned a name for itself in the digitized world of outsourcing and offshoring.

Although India has cultivated an image for being the most-preferred choice for IT (information technology) businesses, there are countless other industries that have seen potential and decided to outsource in India. Today, let us have a look at some of these key industries and understand what exactly encouraged them to embrace the trend of outsourcing in India.


Needless to say, this is one of the most widespread industries in the world. A regular manufacturing business functions with a combination of labour and technical skills – two of the most impeccable and readily available things in India. This implies that by offshoring in India, manufacturing businesses can bring down their labour costs and time consumed to deliver their goods and services. Plus, they also get to save big amounts indirectly on expenses including maintenance, real estate and equipment.

Considering the high cost of these processes in developed countries like the US, the option to outsource employees from India seems like a fairly safe bet. This is probably the reason why NASSCOM claims that ‘manufacturing’ secures a whopping 16% out of all the industries that outsource work to India.


When we talk about production, businesses across the world mainly prefer to outsource to India and China. Production processes like assembly of car parts involve both skilled and unskilled team members. India proves to be a better alternative to countries like China and Malaysia as it is home to both skilled and unskilled workforce that is available at cheaper rates. Per day labour cost in India is around $2, which is significantly lower than $4 to $8 charged by China and Malaysia.


Owing to the growing trend to outsource in India, healthcare is one of the most sought-after industries. Healthcare services in India are technologically advanced and match global quality standards. Many healthcare businesses are outsourcing services in India like RCM (Restrictive Cardiomyopathy) and medical transcription to focus better on treating patients and accomplishing their core business activities. According to a report by Statista, healthcare outsourcing has become a $50 billion market in the last five years, and needless to say, most of it accounts to offshoring in India.


The telecom sector in India has a lot of potential to grow. The major reason to make telecom one of the fastest booming sectors in India is an all-time high need of data bandwidth to support seamless and quality communication. This rapidly growing demand urged telecom companies to adopt more advanced and promising technologies like real-time data analytics. According to a report by Statista, the equity inflow of the Foreign Direct Investment (FDI) for the Indian telecommunications sector touched up to $5.56 billion in 2017. Noteworthy, isn’t it? Such a revenue was certainly the result of active outsourcing in India.


Retail is one of the most profit-making industry all over the world, and it has become one of the most rewarding industries for businesses to outsource to India. There are numerous large retail businesses like Target, Tesco and SuperValu that outsource employees from India to streamline processes and minimize their distance to success. Many of these big market players outsource work to India by setting up their development centres there or just offshoring regular business processes like the processing of invoices and payrolls. So much so, that India’s retail market is expected to reach thousands of billions of dollars soon.

IT Sector

Being the fifth largest Indian industry, the IT sector bags most of its revenue from outsourcing. According to a report by Statista, in 2017, 7.7% of India’s overall GDP was secured by the IT industry, which ultimately makes India the largest provider of high-quality IT services. Talking about the biggest Indian IT service providers, IBM (International Business Machines Corporation), HP (Hewlett-Packard), Wipro and TCS (Tata Consultancy Services) are the most popular and reliable ones.

Wrapping Up

Whether just a part of a particular business process or the whole of it, businesses from all over the world prefer outsourcing to India because of a plethora of reasons, mainly including affordability, communication, flexibility, and availability of skilled and unskilled labour. It might surprise you to note that India accounts for 65% of the entire BPO outsourcing market. Its share in other verticals mentioned above is also surprisingly high and continues to grow with each passing year.

Despite being constantly compared with other popular outsourcing destinations like China and Malaysia, India has managed to reserve its place in the global outsourcing market. Not only is it the most populated country in the whole wide world today, but it has also become the most-loved outsourcing location for several industries. So much so, that the trend of outsourcing to India is not only limited to back-office operations now, but is steadily moving ahead to grab more refined opportunities like research and product innovation. The world is evolving with the premium talent and leadership that India has to offer, and it will continue to evolve promisingly for many years to come. So, are you ready to transform your business and outsource to India?

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