11 Reasons Why IT Outsourcing in India is the Best Decision [2024]

Quick Summary:
Amid the economic downturn, companies are considering IT outsourcing in India for its tech expertise. India's strong foothold in emerging technologies, immense talent pool, state-of-the-art infrastructure, and excellent government policies make it the best decision for IT outsourcing. Explore the 11 reasons why outsourcing in India is for you.

Many companies are reassessing their business strategies in light of the global economic downturn and challenges experienced by leading economies.

Enterprises are encountering a decline in sales within their North American and Europe-UK markets. Major tech players like Google, Microsoft, Meta, Amazon, and Salesforce have announced layoffs in their technology services divisions.

Amidst all this, outsourcing in India has emerged as the most viable choice. Today, businesses are shifting their attention to enhancing their operations in centers located in India to increase profitability.

Experts say that 30-40% of technology jobs lost globally may be outsourced to India.

Big tech companies in India have increased their workforce by 35% in the past year, compared to a global increase of only 12%. India now accounts for 17% of their staff.

But it is not just IT outsourcing that India has proved its metal in. Tech companies like Apple, The Hub Engineering, Samsung, Kia, Boeing, Siemens, and Toshiba are moving their manufacturing lines to the country; India is also on its way to becoming an outsourcing hub for tech manufacturing.

"India looks like a bright spot in particular because you're seeing tech companies starting to move forward in terms of manufacturing in India," 

Michael Yoshikami, Ph.D

CEO and Founder of Destination Wealth Management and Chairman of DWM's Portfolio Strategy Committee.

Today the world no longer looks at India as just a cheap alternative to hiring skilled resources but as a hub for expanding its footprint in emerging technologies like AI, ML, Blockchain, cloud computing, etc.,

The recent Indo-US collaboration fosters tech sharing, co-development, co-production, and adapting regulation among industry, government, and academic institutions. 

The focus industries for collaboration are defense, clean energy, telecommunications, emerging technologies like AI, quantum technologies, cybersecurity, sustainability, biotechnology, space technologies, and semiconductors, proving India's stronghold in tech space.

If you are still in two minds about why ‘outsourcing to India’ is for you?

Keep reading.

11 Reasons why IT outsourcing in India is the best decision

Today, India has become the outsourcing hub for businesses worldwide, from IT to tech manufacturing. 

Here are the top 11 reasons ‘Why is India well suited for outsourcing?’ & ‘What makes it the top destination among its peers?’

1. The largest talent pool of professionals

Access to a large talent pool across technology is one of the top reasons to outsource IT services in India. According to the latest data by Statista, there are 27.7 million developers worldwide, 5.4 million are Indian. Today India has the largest population (19%) of software engineers globally and has surpassed the USA, which has 4.4 million software developers.

India annually adds an average of 1.5 million software developers to its population. With 2500 engineering colleges, 1400 polytechnics, and 200 schools of planning and architecture, India has strategically invested in growing its tech talent to become the world's outsourcing hub.

According to the study by Korn Ferry on Global Talent Crunch, India would be the only nation with zero talent deficit in technology, media, and telecommunications. 

2. Cost-effective resources available at flexible pricing models

Even after three decades, cost-effectiveness is one of the biggest advantages of outsourcing to India. The latest Glassdoor data on software engineers' per-hour salaries shows that hiring a full-time programmer in the USA would cost a company $91,156/ annum. It is ten times more than hiring a full-time developer in India at $ 9751/annum.

Being a developing nation, the cost of living in India is much lower than in the USA and other developed countries. 

According to the Numbeo database, Consumer Prices (Including Rent) in India are 317.1% lower than in the USA.

So, whether you wish to hire developers or create a full-fledged office infrastructure, outsourcing in India can save you up to 3x of the cost you would spend in the US.

Besides, you get multiple engagement models to choose from while outsourcing work to India. You can select an outsourcing partner, hire offshore developers, hire freelancers, or build your in-house remote teams.

You also get the flexibility to decide whether you wish to hire them on a fixed cost, monthly retainers, or hourly rate, depending on the requirement of your project. 

Learn about the various models of hiring remote developers and how to choose the right one.

3. Consistent, high-quality services

India's skilled workforce is complemented by exceptional service delivery. Its software developers leverage cutting-edge technology, software, and infrastructure to gain a competitive advantage.

Indian outsourcing companies adhere to the highest international standard practices, which include:

• The Capability Maturing Model (CMM) evaluates an organization's ability to carry out a project by measuring the maturity of its processes.

• The International Organization for Standardization (ISO) implements Total Quality Management (TQM) to ensure high-quality design, development, production, and instal