The global outsourcing market is booming more than ever because the global economic and financial crisis forced many struggling companies to think of low-cost strategies to develop their services. Currently, the pioneer offshore outsourcing destination India is leading the industry. Nevertheless, China as main competitor is breathing down India’s neck. Experts often compare the two nations as they are similarly large in geographic and population terms and relatively cheap concerning their wages and service prices. In order to detect their real position when it comes to offshore outsourcing, however, one need to point at crucial differences between the nations. This article provides a capacious comparison of India’s and China’s outsourcing sectors, and gives an outlook of who might win the battle “India against China”.

India is the global outsourcing leader because of quantity and quality reasons. This means that the country has one of the highest numbers of ISO-9000 software companies and the outsourcing industry booms all over the large country. Thus, outsourcing hubs are to find in Hyderabad, Bangalore, Mumbai, Delhi etc. Many of India’s outsourcing vendors are long-term experienced and shine with business as well as market know-how. For this reason they are able to deliver high quality services. China, in contrast is a newer player in the outsourcing sphere. The nation does not bear as many large and middle scale companies. Start-ups in China are vastly emerging but lack experience of senior managers.

The government support in India is given as ITO and BPO are two maim facilitators and sources of growth for the Indian economy. Nevertheless, China’s government is even more proactive, boosting the outsourcing sector by spending vast amounts in the country’s infrastructure that matches the nation’s rapid economic development. Government efforts might soon become a distinguishing factor in the two nation’s competition as India’s state leaders cannot afford to rest on nation’s past and contemporary success. Competitor China is closing in on India, and the world’s top exporter creates excellent basic conditions to engage foreign investors and clients.

As India’s ITO and BPO sector have been exponentially growing over the past two decades, the country simultaneously invested in high-quality education that is compatible with global standards. Numerous high-skilled descendants now graduate especially from technology and sciences related Universities and find an occupation in the outsourcing sector. High quality labor, however, has its price. Although India is a low-cost destination, concerning labor costs, China’s wages are significantly lower. That is why China already distinguishes itself with the competitive advantage of being able to offer services cheaper than India. China’s labor force in the outsourcing sector, however, is not as big as India’s and not as skilled especially concerning English language skills.

The United States is India’s biggest client, being responsible for US $2.2billion of India’s yearly ITO revenue. The US preferably turns to South Asia because of India’s maturity in the outsourcing sector and the good English skills of Indian workers. China most significantly provides services to its own, domestic market. The nation further provides a near-shoring advantage for Asian neighbors such as Korea and Japan. China’s government is currently investing in language programs to bring their labor force up-to-date with globally compatible English skills.

Concerning confidentiality of private information, both nations have to work on their data security image. In China, one piracy scandal follows the other in recent years and the media apparatus is highly censored.  This makes China less attractive as a business partner in terms of transparency. India’s legal system resembles the standards of many Western nations as the country adopted the British-based common law. Nonetheless, India also has to improve their execution of regulations and laws on property and intellectual rights.

In the battle of two major outsourcing destinations, India is yet in the fore regarding revenues and profit margins. The nation’s clear advantage is to be an already well-established player on the outsourcing market. Nevertheless, India faces pending poverty issues that are likely to increase with the nation’s ongoing population growth. China, instead, has less experience as an outsourcing player but shines with a low-cost advantage and an ambitious government that pushes the industry to growth. Furthermore, throughout history China surprised the world with extraordinary development speed and emerged to become an economic superpower. Both nations have enormous potential and different kinds of significant advantages. The question is who will make better use of them?

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written by Singh , October 31, 2011

India is a sinking titanic due to their nature ( == monkey culture or monkey nature )...
Just tour onces and you'll never tour asia again...

china overtakes in no time...
see, pharma already overtaken...

Next its IT,BPOs' turn...

Want to survive yourself...then just stop outsourcing to any countries...

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