Indian outsourcing can disappear

A recent article at Forbes titled “The Coming Death Of Indian Outsourcing” reads:

Information technology and IT-enabled services will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India’s foreign-exchange inflows, according to Nasscom, an Indian IT industry organization.

The death of this industry is far from anyone’s mind.

However, the reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.

Well, the SaaS trend plays against Indian outsourcing as well. The cost advantage will disappear pretty soon. That’s where innovation can rescue India’s economical chain.

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