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India & Outsourcing: Best Combination for Foreign Companies to Outsource Their Work

In Business
April 19, 2023
Destination of Outsourcing Work

Outsourcing is the business strategy where a company contracts with a business outsourcing firm to perform a portion of business activities. The culture of outsourcing is increasing rapidly and is being adopted by most of the big companies. It results in rising in no. of forms that provide outsourcing services. It is done by companies to get these benefits :  

  • Focus on core business – Outsourcing of portion of activities done in companies makes a better working culture for the main company so that they can docs on the core business of the company without the distraction of mind
  • Specialized skill – Every outsourcing industry provides a specific service and they focus on one activity which makes such an industry specialized in a specific skill. So companies can get the best skill out of them. 
  • Cost saver – some companies can’t afford the department for each and every activity so they outsource a few activities from outsourcing companies. It is a cost saver for companies as they don’t have to hire excessive staff and outsourcing companies are paid on a commission basis. 

Activities that are outsourced by Foreign Companies in India

  • Information technology – this is the most common outsourcing done by companies. India is the largest producer of engineers. This is the reason, foreign companies’ first preference is India for outsourcing web designing, web development and other IT-related services. 
  • Business process outsourcing(BPO) – BPO is related to customer support service and some other business processes like accounting and human resources. India is the leading company in providing BPO services to companies of foreign companies.
  • Creative services – Creative services like content writing, digital marketing, graphic designing and video production are being outsourced by companies to get specialized skills at low cost.
  • Finance and accounting – Few companies whose core business is totally different from finance and accounting and they can’t afford finance departments in their own company outsource these kinds of services from business services providers. India has a good no. of companies who are providing finance and accounting service at a reasonable price.
  • Manufacturing – Many startups can’t afford to set up a plant so they contact small manufacturing units which work with white labeling. So they outsource manufacturing processes from these units.

Reasons why India is the first choice for foreign companies to outsource their business.

  • A large pool of skilled labor – India is home to a large no. of skilled professionals in the field of IT, healthcare, finance, auditing and many more. So it became one stoppage of all the outsourcing units for companies. 
  • Cost-effectiveness – India is going through an issue of the rise of unemployment as the Indian system is not able to meet the requirement of a rising no. of employees and job. So foreign companies create employment in India because Indian job seekers are convinced easily to work on low salaries.  
  • English proficiency – After the US, India has the largest no. of English speakers. English is the main language in our education system. So there is no language barrier for employees and foreign companies.
  • Government support – Indian government has taken many initiatives to increase foreign companies’ engagement in India by providing tax incentives, and better infrastructure and by bringing policies in support of outsourcing industries. This is how the government is helping : 
  • Infrastructure development – The government made few cities advanced in technology, transport and other facilities so that companies can set up their offices in such cities. As of now, more famous cities in this term are Noida, Gurugram, Pune and Bangalore.
  • Tax subsidies – To promote entrepreneurship, the government tries to reduce the cost of doing business by giving tax incentives, tax holidays and tax exemptions. 
  • Skill development – The government has introduced many courses in India which are done in a short span of time at low cost and really work for skill enhancement. Students choose a course as per their preference and interest, then after being skilled in a specific field, they can get a job. There are many courses in India to get a job in IT field without graduating in IT.
  • Foreign investment promotion – To attract foreign companies, the government has brought policies to reduce liberalization and make special economic zones. 

Conclusion

There are many Indian companies that provide outsourcing services like Tech Mahindra, tata consultancy services and Infosys. There are many small startups also which are into this business. This is the rising business in India. It is providing well-paid job opportunities to job seekers. It really works to enhance the overall economic condition of India. It is beneficial for the companies who outsource as eventually it reduces their responsibility and they can focus on core competencies.