Question

India is often called the ‘Outsourcing Destination’ of the world. Discuss the prime reasons for this name given to India.

Answer 1

Many multinational corporations, as well as smaller companies, outsource their services to India because India offers several advantages:

1. Availability of Cheap Labour: India has a large population, which provides an abundant supply of labour. As a result, labour is available at low wage rates. This helps foreign companies reduce their operating costs by outsourcing business activities to India.
2. Skill and Accuracy: India has a large pool of educated and trained youth who possess the required skills and can perform tasks accurately in areas such as accounting, record keeping, and IT consultancy. Outsourcing also helps people improve their skills. Moreover, they require less training, which reduces training costs.
3. No Communication Barriers: Countries outsourcing work to India do not face language problems because India is one of the largest English-speaking countries in the world.
4. Government Support: India is considered a reliable outsourcing destination due to its stable government, which has taken various steps over the years to encourage and promote outsourcing in the country.