India leads global outsourcing market

India controls 44% of the global offshore outsourcing market for software and back-office services, with revenues of $17.2 billion in the year ended March 2005.

    Skilled workers and low wages attract foreign firms to India

    S Ramadorai, chairman of National Association of Software and Services Companies (NASSCOM) on Thursday said as many as 400 of the Fortune 500 companies now either have their own centres in India or outsource to Indian technology firms.
     
    "While our traditional services are growing, multinational companies are also working out ways to outsource newer processes that were not outsourced before," Ramadorai said.

    He said India's market share was projected to expand to 51% by March 2008, when annual revenues are expected to touch $48 billion, out of global outsourcing spending of $96 billion.

    At the end of March, India's outsourcing industry employed 1.05 million programmers and other skilled workers, while giving indirect employment to 2.5 million people in support services such as transport and catering.

    Global rush

    More than 660 multinational companies each bring business worth more than $1 million annually to India, where hourly software development rates range between $18 and $26, compared with onsite rates of $55-$65 in the US and Europe.

    "While our traditional services are growing, multinational companies are also working out ways to outsource newer processes that were not outsourced before"

    S Ramadorai,
    NASSCOM Chairman



    Scores of Western companies farm out software development, engineering design and routine office functions such as answering customer calls to India and other countries where skilled workers are plentiful and wages low.

    Canada is the nearest competitor with a 32% share; China has 4.9% and Eastern European countries have 4.5%.

    India's revenue for the fiscal year till March 2005 grew 34.5%, as against the target of 25%, Ramadorai said. Of the total revenues, software services accounted for $12 billion, while back-office revenues accounted for $5.2 billion.

    Comparable figures were not given for the previous year.

    In the current fiscal year, India's software and back-office exports are expected to reach $22.5 billion, Ramadorai said.

    SOURCE: Agencies


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