Indian outsourcing market is set to suffer due to high increase of labour cost ! Act Now or for sure be ready for sorry state !!

Indian outsourcing market is set to suffer due to high increase of labor cost. Skills shortage and rising labor cost of India’s talents is driving away most of the big IT players towards East European countries and china to find out cost reduction.  India is no longer able to give cost cut to these big IT players.

Many companies who were opened their offshore center in last few years here in India are planning to move somewhere else or in process of moving out because high cost of Indian Labor Market.

Emerging nations like Morocco, Hungry and other SE nations will eat major chunk of Indian IT outsourcing market share if we still not sit down, do some brain stormy thinking and make workable long term strategy to keep this industry at par.

We desperately need that our government should sit down with outsourcing and off shoring corporate leaders to identify specific skills required for the industry, current market trend and how we can reduce the cost of products and solution without hurting the cost of labor market and in future how we can control labor rising cost. Government should also try to find out the way to decrease taxes to keep this industry growth for at least next decade.

Outsourcing industry gives India billions of Dollars every year; this is the main factor that our economy is growing so fast. If we don’t do major brain stormy session now and don’t come up with some long term strategy for this industry then be prepared for sorry state.

We are heading to lose our greatest strength – low-cost labor – Act Now or for sure be ready for sorry state !!

India no longer top outsourcing destination?

ndia’s dominance as a low-cost outsourcing destination seems to be on the decline, with countries like China, Morocco and Hungary fast emerging as the preferred choices by IT services providers, a recent study says.

Focused on UK’s top IT service providers, a study by Pierre Audoin Consultants (PAC) showed that China, Morocco and Hungary are the new locations of choice to set up offshore sourcing centres.


  1. thats certainly a big issue..what with IT slowdown already hitting the country

  2. You are right to some extent but the cost factor wont go that easily.. In India wages are still a lot lower as compared to developed countries and the reason I am being optimistic is that India will just move up the chain and take up specialized outsourcing as with time it becomes costlier to provide low end services like simple cold calling and sales and stuff..
    India is fast becoming R&D outsourcing destination and R&D costs here in India are still one of the lowest as compared to the rest of the world and there is no lack of talent fortunately 🙂

    Recession in the USA will surely slow things down but this ongoing recession will come and go and things will get better in the near future 🙂 This recession in USA will not hit Indian businesses as they will need more cost cutting and India is the place to be at 🙂

  3. India is going through a ‘normal phase’ in market / capitalist economy. Most developed countries have gone through this phase. I don’t think India can stop it. But I am sure there are lesson to be learned from other countries going through this phase and a good thing would be not to ‘re-invent the wheel’ but trying to be as efficient as possible.

  4. India can’t be sitting complacent on this front. Outsourcing boom may just end, and we will be left stranded.

  5. Sad news for us and hope that it will not effect us badly

  6. It’s a tough one, first people moved to India to use it as a cheap source, and now there are cheaper sources, like Korea/China. To remain competitive we need to insure that we have the skills, rather than just the numbers. The solution is to offer a higher quality of service than these other countries, I think India will win hands down when it comes to English skills, and in the long run many many companies will come back to us.

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