India’s outsourcing lead over China is “weakening”

China’s IT and business process outsourcing industry will grow twice as fast as India’s this year, according to research by a Canadian IT analyst company.

While the Indian industry will grow by 14% to reach $54.3 billion, a 43.7% share of the global market, China’s outsourcing sector will grow by 30% to reach $35.8 billion, 28.7% of the global market, the report by XMG Global found.

The figures demonstrate the extent of China’s bid to rival India as an outsourcing destination. India had a ten year head start but China appears to be catching up fast.

"India’s weakening lead is due to the substantial efforts of China, the Philippines, and other offshoring destinations in building their capacity to attract significant amount of investment," commented XMG chief analyst Lauro Vives. "While India continues to remain the leader, the rest of the offshore countries are now beginning to mature."

In October, HCL Technologies CEO Vineet Nayar told employees that "China is the biggest threat to Indian IT industry. They are where we were 10 years ago".

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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