Offshoring to India, Top trends, Companies, Pros and Cons
There are plenty of reasons for this rise in offshoring to India, including lower labor costs and the fact that many companies feel comfortable offshoring to India because some of the biggest companies in the world are already offshoring to India. While there are some risks involved with offshoring your business operations, they're manageable ones that can be overcome with proper planning. Let's take a look at some of the top trends in the offshoring industry in India and how they affect your business today
Offshoring to India is on the rise.
Indian companies are engaging in offshoring at an increasing rate, as demonstrated by the growth of jobs in India. The number of jobs in India is expected to grow faster than elsewhere, according to a recent study conducted by Oxford Economics and commissioned by Tata Consultancy Services (TCS).
The government has also been encouraging foreign investment in order to increase its productivity levels. It has passed various policies including tax incentives for companies that want to set up shop in India or export services from their international offices to India (known as offshoring). With favorable conditions such as these, many multinational corporations are now looking towards expanding their operations into this country and exploring the offshoring industry in India.
Offshoring Companies in India
The top offshoring companies in India also form the most influential and recognized offshoring companies globally. These include Infosys, Wipro, TCS, Tech Mahindra and Capgemini to name a few. Many other offshoring companies in India are growing to shortly be included in this global offshoring leaders list. Below are some of the best known ones:
- HCL Technologies
- L&T Software Services
- Glocal Pinnacle
- Mindtree Ltd
- e-Nxt Solutions Pvt Ltd
Pros of Offshoring to India
Offshoring can be a good way to save money.
You can save on costs in three ways:
- The cost of having employees overseas is lower than the cost of having them on-site.
- Outsourcing your work to resources outside your company means that you don't have to pay for office space, equipment, and other overhead expenses. This can help with hiring costs as well as general business expenses such as running errands or making deliveries.
- Offshoring to India will also allow you to generally save money due to the pay-scale difference and disparity present in your domestic market and the Indian market
Greater Data Security
The offshore industry in India is quite trustworthy as these offshore firms can provide greater security than firms based in other countries. All of your company's information is encrypted and protected by firewalls and other security measures. Only authorized personnel can access it, and it is stored in a secure, geographically separated facility backed up regularly. In terms of human data leaks, offshore companies are highly likely to sign NDAs when any particular organization or project requires it. This is also one of the reasons why you should opt for an offshore company instead of a freelancer.
Encouraging Foreign Investment
The Indian government has made it easier for foreign companies to invest in, export to and do business in India. In fact, the Foreign Direct Investment (FDI) policy of India is so friendly that it has been rated as one of the most open economies in the world by several international bodies including World Bank and IMF. This is definitely a major contributing factor for the offshoring industry in India as it provides greater incentive to foreign investors to start offshoring to India.
Cons of Offshoring to India
The Right Support
It can sometimes be difficult to get reliable support with an offshore model. Businesses that operate with a global presence need reliable support. For companies with overseas operations, this can be especially challenging.
However, there are various ways to get reliable support from an offshore partner; some of these options include:
- Going with a large provider who has developed strong relationships in the industry and knows how to maintain those relationships
- Requesting references from other customers who have worked with your potential partner
Trust and Security
Can you trust your offshoring partner? The Indian government is cracking down on IP theft and data breaches, but there have been instances where these things have occurred at reputable offshore companies in India. Before choosing a partner, do your research — and ask for references from other customers.
If your company relies heavily on specific knowledge (like medicine or law) that cannot be easily taught over Skype or emailing files back and forth, this creates an obstacle for offshoring success.
We’ve helped various organizations overcome these hurdles and successfully set-up their offshoring operations in India. If you’re facing issues in your offshoring set-up or would like to learn more about offshoring, feel free to reach out to us.
Offshoring to India has many benefits over other countries. There are plenty of skilled workers available and they can be hired at a reasonable price. The Indian government also offers tax breaks and other incentives for foreign companies to invest in India, making offshoring to India a good choice for many types of businesses. Some of the top offshoring companies in India comprise of the global best and have over 20 years experience in their field. Offshoring to India can be a good way to save money while increasing productivity, but it also has its own set of risks and concerns that must be carefully considered before moving forward with an offshore project. Carrying your offshoring operations ahead with a large and experienced company and expert guidance allows you to overcome all these issues. Talk to us today and bring your business operations to India to bring your business to success.