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Home > India > Business > PTI > Report

India no longer top outsourcing destination?

March 05, 2008 16:23 IST

India'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.

PAC is a European market research and strategic consulting firm for Software and IT Services Industry (SITSI).

According to the study, since the beginning of January 2007, UK's 20 largest IT services suppliers have opened 21 new global delivery centres. However, of these only two are were located in India.

Four such centres were set up in China, while Eastern Europe and Morocco had three each, the study added.

"India's position as the premier low-cost IT sourcing centre is not under serious threat in the near term. But what we are seeing is vendors (are) looking to reduce their reliability on India's heated labour market...," Nick Mayes, a senior consultant at PAC, said in a statement

The 20 largest IT services vendors in the UK are based on rankings in PAC's annual SITSI report. These include EDS, IBM, Fujitsu [Get Quote], Capgemini, Capita, Accenture, CSC, HP, BT Global Services and LogicaCMG.

The two new facilities launched in India were both outside the traditional hot spots of Bangalore and Mumbai, IBMs new centre has been set up in Noida, while Tata Consultancy Services' [Get Quote] expansion site has come up at Hyderabad, it said.

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