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Reasons Why IT Outsourcing to India is the Best Decision

This blog is for businesses seeking cost-effective and skilled IT outsourcing solutions and looking to understand the benefits of choosing India as their outsourcing destination.

Reasons Why IT Outsourcing to India is the Best Decision

  • Last Updated on November 06, 2023
  • 11 min read

With the global economy becoming increasingly interconnected, outsourcing is a strategic move for businesses seeking to remain competitive.

According to the report of Statista,

“The IT Outsourcing market is anticipated to achieve a revenue of US$460.10 billion in 2023 and is expected to demonstrate a compound annual growth rate (CAGR 2023-2028) of 11.07%, culminating in a market size of US $777.80 billion by 2028.”


But with so many outsourcing destinations to choose from, how do you decide where to outsource your IT projects?

Look no further than India - the world's leading destination for IT outsourcing.

In this blog, we'll explain the key benefits of outsourcing to India, and how to find the right outsourcing partner for your business.

But before that, know India's Dominance as a Leader in IT Outsourcing.

India's Dominance as a Leader in IT Outsourcing

India has established itself as a powerhouse for IT outsourcing over the past couple of years. Here are some impressive stats about India's IT industry:

  • According to Statista's most recent data, there are 27.7 million developers globally, with India accounting for 5.4 million.
  • The IT Outsourcing - India market is expected to generate $8.81 billion in revenue by 2023, with a compound annual growth rate (CAGR 2023-2028) of 17.92%. This expansion is expected to result in a market size of US$20.09 billion by 2028.
  • 7 of the top 10 IT services companies globally are headquartered in India, including Tata Consultancy Services, Infosys, and Wipro.
  • In a recent survey, it was found that India was the top choice for 80% of outsourcing firms in the United States and Europe.
  • According to a report from The National Association of Software & Services Companies (NASSCOM), nearly half of Fortune 500 companies opt for Indian software outsourcing services.

It's clear that India dominates the IT outsourcing landscape. The maturity of India's IT industry, coupled with the sheer talent pool and cost advantages, make the country hard to beat for global IT outsourcing requirements.

Key Benefits of Outsourcing IT to India

There are many tangible benefits to outsourcing IT services to India. Let's look at some of the top reasons why outsourcing IT to India should be a top consideration for your business in 2023:


Large Talent Pool of IT Professionals

With over 5 million IT professionals, India has the largest IT talent pool in the world surpassing the US. Each year, India produces around 1.5 million new engineering graduates, many specializing in IT and computer science.

Indian IT professionals are highly skilled, trained, and experienced in the latest technologies and industry best practices. Top Indian IT companies invest heavily in training programs and certifications to sharpen the skills of their workforce.

This vast talent pool allows Indian vendors to staff large, complex projects and build dedicated offshore teams for clients. You get access to subject matter experts across emerging technologies like cloud, AI, blockchain, and more.

Cost-effective and Skilled Workforce Available at Flexible Pricing Models

Outsourcing IT services to India offers access to top talent at significantly lower costs. Indian IT professionals are available at a fraction of the cost of hiring similar talent in Western nations like the US and Europe.

Average hourly rates for software developers in India typically range from $25 to $50 per hour, compared to well over $100 per hour for US-based talent.

For the same budget, companies gain exponentially more technical resources by leveraging Indian IT talent. And India offers different pricing models for added cost savings and flexibility:

  • Fixed Price Model: A set fee for the entire project based on clear deliverables and timelines. Ideal for well-defined projects.
  • Hourly/Time and Materials Model: Pay for talent by the hour as work progresses, offering flexibility. Includes fees for used resources.
  • Dedicated Development Team: Hire dedicated developers for a monthly fee without employment overheads.

This variety of pricing models allows companies to select the model that best controls costs and offers financial transparency. The budget predictability along with access to skilled technicians and developers is a major benefit of outsourcing IT to India.

Consistent and High-Quality Services

Leading Indian IT companies have fine-tuned their processes and quality frameworks to deliver consistent, high-quality services. They have adopted industry standards like ISO 9001, SEI CMMI certifications, and Six Sigma practices for process improvement.

Many Indian vendors have long-standing relationships with Fortune 500 companies which are a testament to their delivery capabilities. With a strong quality focus, they ensure high code quality, security, and availability - enabling you to scale your operations risk-free.


Time-Zone Advantage

India's geographic location and time zone give IT outsourcing clients a unique advantage. India Standard Time is UTC +5:30, meaning there is only a 30 minute time difference with some eastern regions of the world. And with the US, UK and Europe, the time gap can range from 5 to 12 hours.

This time zone edge allows for accelerated development cycles and quicker turnaround on projects. Design specs or code can be handed off at the end of a business day abroad, and the next morning fresh work will be ready for review. Issues can also be resolved faster with Indian teams available during their normal workday as per US or UK nighttime hours.

The time zone overlaps also facilitate synchronous communications when needed. Companies can leverage the time difference to gain a business productivity edge from IT outsourcing.

Cultural Compatibility

India shares a strong cultural, educational, and professional affinity with Western countries, especially the US and UK. This facilitates a better understanding of client expectations and smooth collaboration.

Indian IT professionals have a good grasp of American business culture. Most are fluent or proficient in English. The educational system also focuses heavily on English and emphasizes critical thinking.

Leading IT companies ensure their teams are well-versed with overseas business etiquette for seamless engagement. This makes outsourcing relationships highly productive.

Transparent Communication

Transparency and proactive communication are essential for the success of any offshore IT or software development project. Outsourcing partners in India understand this well and take pride in clear, consistent communication with their clients.

Leading IT services firms place a premium on English language skills precisely to avoid communication gaps. Project teams provide frequent updates to ensure clients have full visibility into work progress, milestones achieved, roadblocks faced etc. Any questions or concerns are addressed promptly and comprehensively.

Many outsourcing vendors also provide access to collaboration platforms, project management tools, burn-down charts, online dashboards and more. The emphasis on transparent, proactive communication minimizes uncertainty and builds trust in outsourcing relationships.

Favorable Government Policies Toward the IT Industry

The Indian government has made the rapid growth of the IT sector a key economic priority. As a result, the government has implemented investor-friendly policies.

Some examples include tax breaks for tech companies, business subsidies, relaxed labor regulations, and heavy investment in infrastructure like high-speed Internet backbones.

These policies give India a competitive edge in attracting IT investment and make it easier for outsourcing service providers to deliver robust services.

Excellent Infrastructure

India has made significant investments in building state-of-the-art IT infrastructure to enable technology companies to thrive and scale. Robust digital infrastructure ensures outsourcing projects proceed smoothly without technical bottlenecks.

India's major metro cities are now connected via high-speed fiber optic networks with fast, reliable internet connectivity. Data centers in cities like Ahmedabad, Mumbai, Chennai and Bangalore can compete with the best globally in terms of speed, scalability and security.

India also has a reliable electricity supply with power backup provisions for mission-critical projects.

Leading IT outsourcing vendors operate from sprawling, state-of-the-art campuses designed specifically for software development. Cutting-edge amenities provide comfortable working environments for IT professionals. This infrastructure provides the foundation for efficiently delivering projects for international clients.

Fastest Time-to-Market

Getting to market quickly with new products and innovations is critical for companies to stay competitive. This is another area where outsourcing IT work to India provides decisive advantages.

Indian IT services firms possess domain expertise across various industries like finance, healthcare, retail, manufacturing, telecom etc. Exposure to solving complex technical problems for global clients sharpens skills further.

A deep understanding of the latest technologies allows crafting optimized solutions that accelerate application development and testing cycles. Proven methodologies like Agile and DevOps can be implemented for faster iterations and continuous delivery.

The outcome for clients is reduced timelines from project conception to launch. Outsourcing IT to India enables putting high-quality software and digital products in the hands of customers quickly.

Proficiency in English

English is the global language of business and technology. India's British colonial history has led to English fluency being prevalent across the country. Today, India has the world's second-largest English-speaking population, after the US.

In major metros, the percentage of English speakers rises to nearly 50% of the population. English is one of two official languages of India, widely used in education, business and administration. This high degree of English proficiency makes collaborating with Indian IT professionals seamless.

How to Find the Right IT Outsourcing Partner in India

Convinced of the merits of outsourcing your IT to India? Here are some tips for finding the right IT outsourcing partner:

  • Verify industry experience- Choose established players with substantial experience handling projects similar to yours. Evaluate their clientele and success stories.

  • Assess technical expertise- Gauge their technical competencies around your specific project needs through discussions and visiting their facilities if possible.

  • Check certifications & reviews- Look for ISO certifications and positive client reviews on credibility. Audit completed projects if required.

  • Visit facilities- If possible, visit candidate offices to directly assess services, information security policies, infrastructure and workplace culture.

  • Start small- Begin with a small pilot project to test capabilities before awarding longer contracts.

  • Compare pricing models- Get bids from multiple vendors and compare pricing models like fixed, hourly rates, dedicated team etc.

  • Evaluate communication- Assess English fluency and transparency in communications. Discuss the escalation matrix and reporting structure.

  • Sign NDAs/contracts- Ensure comprehensive NDAs and contracts are in place covering performance metrics, security policies and legal compliance.

Choosing the right partner takes due diligence. But with India's deep expertise, you are sure to find an outsourcing provider that perfectly matches your needs and expectations.

Outsourcing to India - A Winning Strategy

Outsourcing IT to India comes with tremendous advantages that directly impact your bottom line. The depth of talent, expertise across emerging technologies, cost-arbitrage, time zone proximity, cultural compatibility and favorable business environment make India the ideal IT offshoring destination.

As per industry reports, India remains the world's #1 outsourcing destination in 2023 and upcoming years. With the global economy facing headwinds, outsourcing to India serves as a strategic lever companies can deploy to drive cost optimization and build resilient IT capabilities.

If you are looking to leverage the power of Indian IT talent and expertise for your business, it's time to get in touch with a reliable outsourcing provider like ThinkODC.

Partnering with us can provide your business with the technology edge and data-driven insights needed to stay competitive and succeed globally.

ThinkODC - Your Trusted Outsourcing Partner

ThinkODC is a reputed IT outsourcing company with over 11 years of experience partnering with global clients across industry verticals like finance, retail, healthcare, education and more. Here's what makes them a reliable outsourcing provider:

  • Strong track record of delivering mission-critical technology projects with on-time, within-budget results for Fortune 500 companies and fast-growing startups alike.
  • A global delivery model with dedicated offshore development centers in India and an onshore presence in the USA for closer coordination with clients.
  • Rich expertise across the latest tech skills like cloud engineering, big data, machine learning, blockchain etc.
  • Flexible engagement models (dedicated teams, fixed price projects, staff augmentation) tailored to your needs.
  • Round-the-clock service availability through their Follow the Sun delivery model.

ThinkODC has gained the trust of global clients by providing strategic technology guidance combined with consistent execution and transparency. Their capable resources, processes, and infrastructure provide the right foundation for your IT outsourcing success.


Ubaid Pisuwala

Co-founder of ThinkODC and Entrepreneurship, Formulation of Business Strategies, Creation and Management of high-performance teams, Management of key corporate relationships.

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