India way ahead of China as top choice in outsourcing

India continues to hold on to the top spot in being the most attractive location for offshoring of such services as Information Technology, business processes and call centers, according to a global management consulting firm.

India remains the best offshore location by a wide margin, even if wage inflation and the emergence of lower-cost countries decreased its overall lead, according to the annual ranking of consulting firm A T Kearney.

As far as China is concerned improved infrastructure and relevant people skills have increased its attractiveness as a low-cost option for servicing Asian markets.

The gap between India and the second-ranked country, China, is larger than the gap between the next nine countries combined.

But India's lead has shrunk slightly compared to 2004 mainly due to a slight reduction in India's financial attractiveness, the result of wage inflation in India and the emergence of new even lower-cost contenders--in Africa and South East Asia like Ghana and Vietnam.

China maintains its second place ranking and partially closes the gap with India largely to continued improvement in its infrastructure quality and the availability of relevant people skills.

It is being pointed out that for a growing number of Asian and western multinationals, China remains the best choice for serving their growing operations throughout the east Asia region and a low-cost option for servicing established markets in Japan, Korea, Taiwan, Hong Kong and Singapore.