The past few years have seen a strong growth in the outsourcing phenomenon. Companies outsourced in order to benefit from the reduced cost to their overhead. For many years, India has been the de facto choice for outsourcing. There are many reasons for this: availability of a vast pool of English speaking talent, good education, time difference especially between the U.S. and India, and lower costs. All these factors made companies head towards India. These included IT giants like Microsoft, IBM, google and others. It can be safely stated that the outsourcing industry started in India.
The Threats to India
As of 2013, India ranks number 1 in outsourced IT services, accounting for about at least 50% of the market. However, India faces the following threats to its current #1 rank:
The global recession of 2008 - 2009
The global recession has had an adverse impact on outsourcing in India, but it has now turned around. Many U.S. and European companies are still treading cautiously.
India is the largest democracy in the world. However, there are many political factions in the country. The current government is one of coalition, and it is expected that the coming years will see political coalitions rule. But the roots of Indian democracy are deep, and support to outsourcing will always be there, irrespective of the government in power.
Threat from China, Brazil and Russia
Having understood the benefits of outsourcing, countries like China, Brazil and Russia are wooing companies to establish a presence in their country. However, the language barrier is a strong one to cross, and India scores in this area.
In conclusion, it can be said that while there are threats, India still enjoys a substantial advantage over other countries in providing IT and ITEs services to the developed nations of the world.