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Outsourcing Industry Statistics in India (1980 to 2021)

One of the main reasons many businesses choose to outsource is the lower costs than the in-house team for performing specific tasks and processes. India is one of the top outsourcing countries because of its reputation as a cut-rate outsource destination. However, there are many other reasons why the outsourcing industry in India has grown.

India’s Journey to Become an Outsource Destination

IT industry in India started in the 1980s, and outsourcing emerged in the 90s. The first company to outsource their back-office tasks to India was Global Airlines, followed by many IT companies. It was the time when the government started to focus on the implementation of plans needed for economic reform. The government started to think about privatization and liberalization. Many foreign companies invested in the Indian market because of its liberalized investment policies. 

The Indian telecommunication industry grew a lot due to the participation of commercial players and privatization. Many Indian companies have followed international standards to develop their internal practices and processes. This resulted in the growth of communication and technology, including the introduction of IP telephony which helped in more accessible and more efficient international communication. It was helpful for economic growth that was also helpful for the country’s outsourcing industry.

Today, India’s most common outsourced business processes are IT services, Customer Support, Digital Marketing, Accounting, Bookkeeping outsourcing, and Human Resources.

Numbers That Show India is Better Than the Rest

India is the most advanced and rich country when it comes to software development. It has many young people who are eager to accumulate all the skills and deliver the best. It is helpful to attract companies that are looking for a technology partner, development partner, or an IT outsourcing company for their technical needs. All of this didn’t happen without any reason. Here are some stats and numbers that show that India is better than the rest of the world regarding software development outsourcing.

• More than 80% of outsourcing companies in India plan to increase their technical headcount in the coming year, according to the 2017 Asia Pacific Occupier Survey Report.
• The IT outsourcing industry in India is anticipated to grow by 7.25% CAGR and reach around 8,830 billion INR by 2025 from 5,649.47 billion INR in 2019.
• The cost of outsourcing to India is lesser than developed countries. Companies can get developers at an average of $25 in India. 
• More than 40% of the Indian workforce is looking forward to learning new skills and improve their skills to become ideal candidates for the development process by 2022.
• According to AT Kearney’s 2019 Global Services Location Index, India is at the top spot for outsourcing.
• India tops the list of countries having the highest ISO-9000 certified software companies, and it has more than 75% of the world’s CMM Level 5 certified companies.
• India is expected to surpass the United States by 2023 in having the most software developers, according to a C SharpCorner report.
• India is second on the list of the largest English-speaking countries, which eliminates any communication barriers.

Most Popular Outsourcing Services

The most popular outsourcing services are:

• Customer Support
• Data Entry
• Mobile Application Development
• Mobile Application Maintenance
• Database Administration
• Datacenter Operations
• Disaster Recovery
• System Support
• Web Hosting
• Network Operations
• Web Operations
• Software cloud hosting services

Role of IT & BPO in India’s Growth

The IT & BPO sector played an important role in India’s growth, including the cost of international connectivity reducing rapidly and improving quality of service. NASSCOM has played a vital source in outsourcing by acting as a coordinating body for the industry. 

As per NASSCOM, the primary reasons for India’s success in the BPO and ITES industry are:

• Skilled, abundant, English-speaking workforce is being joined even by ITES hubs like Ireland and Singapore.
• Better focus to maintain performance and quality standards.
• High-end facilities for telecom and infrastructure which are equal to global standards.
• Turnaround times are faster, and the ability of offering 24/7 services due to the country’s unique geographic locations helps in leveraging time zone differences.
• A proactive and favorable policy environment that attracts BPO and ITES investments and streamlines the processes and rules.
• The tax structure is friendly, which places BPO, and ITES industries equal to IT services companies.

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Since the inception of the outsourcing industry in the 1980s, India has become the most significant player in offshore delivery. English-speaking manpower for technology and non-technology spaces is matchless. The world views the Indian service provider community as a strategic business partner in IT services and other services. The outsourcing industry has grown a lot in India from 1980 to 2021, and it is expected to grow more in the coming years.