Offshoring to India - A strategic approach to expanding business
26 Apr 2022
India has emerged as a predominant player as an
offshore service provider
for business processes. Multinational companies have found India as one of the most desirable countries to do business with due to the variety of factors like low cost, availability of highly qualified workers, English as the common business language, governmental support etc. The country’s offshoring sector is mostly ruled by the IT services sector. But before proceeding to know about how offshoring works, one needs to understand what offshoring is.
Offshoring is the practice of processing business operations from one country to another country with the motive of cutting down the cost of doing business, enjoying tax benefits, complying with less stringent regulations and, quite often, exploiting the local market potential. Manufacturers offshore the first stage of the production of goods in another country where the raw material and labour costs are lower and export finished products to their own country. Major U.S. and foreign companies have set up businesses in India such as KPMG, Toyota, Motorola, Honda, Nokia, Fujitsu, HSBC, Generic Electric, American Express, International Business Machines (IBM), Electronic Data Services (EDS), Accenture, Toshiba, McDonald's, Pizza Hut, Reebok and dozens of others. Companies prefer offshoring to leverage global offshoring success and gain business momentum. Much of the motivation for offshoring arises due to the lower cost of producing goods and services in an offshore country, compared to their own country.
Advantages of offshoring to India:
The advantages offered by the offshoring consultants in India are listed below:-
Cost reduction –
This is counted as the major reason why major MNCs prefer to offshore their business operations in India. The costs of labour as well as many raw materials like minerals, etc. in India are cheaper in comparison to other countries.
Cheap and skilled workforce –
India has a vast pool of young university graduates estimated at 17 million with 3.5 million being added every year, which opens the gate for getting a competent and cost-efficient workforce available in India.
More concentration on core business –
The manufacturing consultants in India helps the companies by taking up the responsibility of or ensure proper guidance on the various activities related to the setting up of the manufacturing plant as also specifics including sourcing of raw materials, equipment, erection and commissioning, etc.
• Complete assistance –
The offshoring consultants in India including manufacturing and sourcing agencies in India hold expertise in various domains, thus providing relevant solutions to problems related to the production or services offshored.
Tax and benefits –
India provides many types of incentives such as tax holidays, subsidies, etc. to attract companies to Foreign Direct Investment (FDI)
Better control –
Indian manufacturing consultants are well able to provide proper guidance for proper management at the project level and even post commissioning for regular operations including overseeing and regulation of all the company’s functions if it opts for the same..
Enlisting the benefits, offshoring to India offers a higher profit margin, access to niche talent, the opportunity to scale up sustainably, fewer administrative burdens, business growth etc. India produces 1.5 million engineering graduates every year spread over various disciplines including software and IT services. With English as the common business language, Indian engineers can communicate with general fluency, but can also be extremely clear and concise in a highly technical environment.
Offshoring helps increase a business’s output and possibly also improve its technical expertise, without undue stress, hassle or cost. Industry experts, a
B2B sourcing platform
, help in finding reliable manufacturing and offshoring consultants in India who command adequate expertise and knowledge to leverage offshoring for the growth of a company’s business.
Leave A Message
Leave A Message
Owned & Developed By