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India is one of the highest job creators due to offshoring

Last updated on: October 8, 2012 12:20 IST

India is one of the highest job creators due to offshoring

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M Saraswathy in Mumbai

India created 64,370 jobs in the last four years owing to outsourcing activity.

It has not only grabbed one of the largest number of offshore projects in the world, but remains one of the most attractive locations for conducting offshore business activity in the South East Asian region, jut behind Philippines.

Tom Carroll, director-corporate research, Jones Lang LaSalle, said that international corporations are increasingly focused on productivity, operational efficiency and future scalability, rather than straight cost-saves in the short term.

"India will need to ensure it reflects these concerns if it is to retain its leading position," he said.

According to research by Jones Lang LaSalle, India maintained the first position in terms of top 10 locations for foreign direct investment in shared service centres from 2003 to 2011.

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Photographs: Reuters

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Anuj Puri, chairman & country head, Jones Lang LaSalle India, pined that while still hitting the high notes on the offshoring market, India will need to work hard to maintain its edge.

India has been favoured as a top destination for offshoring owing to a large talent pool and low costs.

Puri raised concerns about competition from markets like China and Indonesia and added that they have been advising their clients on effective differentiation strategies that are designed to help them maintain the edge.

The research by Jones Lang LaSalle has explained that supply conditions and real estate challenges posed to those companies seeking an offshore solution have also evolved.

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Image: Indian Border Security Force personnel patrol at the white desert of the Rann of Kutch, Gujarat.
Photographs: Amit Dave/Reuters

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"Sourcing appropriate real estate in often remote offshore locations has always been one of the challenges of the offshoring process.

"These challenges remain in many locations, however in some of the more mature offshoring markets such as Central and Eastern Europe the market is evolving to better meet the needs of international demand," the research said.

Analysts believe that finding appropriate labour at adequate costs, high costs of real estate will continue to remain challenges to India as an offshoring destination.

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Photographs: Sherwin Crasto/Reuters
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However, they believe that the country had evolved as a market catering to the complex needs of the foreign players and will be on the top of the charts if the other party does a proper analysis of the situation.

A recent Ernst & Young study had pointed out that while India has been one of the leading destinations for shared services, the country is rapidly emerging as a manufacturing location for many foreign corporations.

By 2020, 25 per cent of their survey respondents see India among the world's leading three destinations for manufacturing.

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