Valdar's Blog

Published media reports quoting a recent study claims that India could well be on the way to losing its top position in the outsourcing industry to emerging giants like China and the Philippines.

A study conducted by Global Services-Tholons has ranked the top 50 emerging global outsourcing cities which indicates that China with six takes top honours over India and Philippines with four cities each.

However, Philippines edges past India due to the fact that the list boasts of two new cities in the top-50 list including Quezon and Mandaluyong, while in the case of India only Jaipur figures as the new choice.

It may be recalled that India had topped the 2007 rankings with six new cities in the Top-50 list, though the study now says that outsourcing clients are getting increasingly sophisticated while making their choice of locations.

Instead of making their outsourcing decision on the overall strength of countries, they are closely looking at the strengths of individual cities, even those considered tier-II and tier-III, to ship their work, a report published in the Deccan Herald has said.

According to the report, India also lost out its top spot in the top-10 elite list of emerging global cities where three cities from CHina feature while India and Philippines could manage only one city each. Last year, India had five cities in this elite list with Chennai emerging as the world’s top emerging destination, the position going to Cebu (Philippines) this year.

The newspaper report quotes un-named analysts to state that India’s position is likely to get weaker as other countries begin aggressively promoting their destinations. The latest top-10 list has cities from Vietnam, Poland. Egypt, Brazil and Argentina, the report says.

It adds that Indian cities are drawing negative publicity due to poor governance issues like the infrastructure woes of Bangalore and the lack of trained manpower in some of the smaller destinations. However, India continues to hold the pole position with respect to the list of established outsourcing centres, claiming six of the top-eight current destinations.