India Likely to Lead IT, BPO Outsourcing Industry for 20 Years

According to a study by U.K.'s Warwick Business School, India is likely to remain a strong force in the IT and BPO outsourcing arena for at least another twenty years. In the meantime, China will trail behind attempting to match India's success in the rapidly growing industry, the study said.

Indian outsourcing giants Wipro, Genpact, TCS, and Infosys assisted in taking the Indian economy to a whopping 9% rate of growth ahead of the global economic downturn that roiled investment markets in 2008.

Top executives at these outsourcing firms speculate that China is now a chief rival in the area of outsourcing. Hence, Indian outsourcing firms have begun investing in outsourcing capabilities in the mainland. Just last week, Wipro unveiled a delivery center in Chengdu, adding to a facility that already exists in Shanghai. The Chengdu global delivery center will provide services for banking, financial services, manufacturing and insurance sectors. The center will offer expertise in Chinese, Japanese and English, reports gulfnews.com

Concurrently, rival outsourcing firm Genpact runs business process service centers in various cities in China, including Changchun, Shanghai and Dalian.

However, a WBS report, requested by the worldwide technology and consulting group Cognizant, projects that China's outsourcing industry is not as mature as that of India and that its rise has yet to be determined. According to the report, China is likely to escalate as an alternate market, but will struggle to maintain scale in North American and western European markets.

One author of the WBS report, Ilan Oshri, who is an associate fellow at the London School of Economics Outsourcing Unit, commented that Indian will keep its edge in outsourcing for a minimum of 15 years. This is primarily because India's top outsourcing firms like Infosys, TCS and Wipro have achieved a global footprint that is likely to be maintained.

Oshri added, India is a powerhouse in outsourcing, not because it is less expensive to outscource to India, but because it is smart. And this is not the same case with China, said Oshri, adding that Chinese vendors are unlikely to be powerhouses.