GCCs Bet Big On India Due To Low-Cost Talent

Many of the Indian outsourcing providers have started building their offshore centres in countries, apart from their home ground, such as Philippines, Sri Lanka and Indonesia, where the cost of living is lower than India and China. However, these countries have limited talent pool  - Prabhudas Lilladher 

Bengaluru: India remains an attractive offshoring destination despite competition rising from South Asian neighbours like China, Malayasia, Philippines, Sri Lanka and others on the back of its one of the lowest hourly wage rates of software professionals along with abundant availability of STEM students.

According to analysts, such competitive advantage of India makes it a centre of attraction for setting up GCCs (Global Capability Centres) by foreign firms.

“The hourly rate of talent having similar skill sets varies across regions, with Asia Pacific having the lowest hourly wage rate ($28) as against North America at $77 and Western Europe at $75,” a report by Prabhudas Lilladher said.

The report mentioned that hourly wage rates paid to software developers in Asia Pacific region remained the lowest in the world. The rates of African regions are also higher than Asia Pacific region.

Within the Asia Pacific region, Malaysia pays the highest hourly wage rate of $33 per hour. Both China and India pay around $29 each to software developers working in this region. In APAC, Philippines and Sri Lanka pay the lowest wage rate of $28 to software developers.

“Many of the Indian outsourcing providers have started building their offshore centres in countries, apart from their home ground, such as Philippines, Sri Lanka and Indonesia, where the cost of living is lower than India and China. However, these countries have limited talent pool, which ultimately makes India a prominent ground for acquiring talent” the report by Prabhudas Lilladher said.

“India is again benefitting the most from its political stability and large English speaking population, which enables faster integration in large enterprises,” it added.

That is the reason that the country continues to be a hub for GCCs globally. The US, Latin America, China, Tunisia, Europe and APAC region are other popular destinations of setting up GCCs.

“India, Tunisia and APAC have lower cost of operations compared to other regions. Hence, MNCs across the world are looking at India as the top destination for setting up or expanding their operations,” the report said.

India as a geography is likely to add 115 new GCCs each year taking the total number of such technology captives to more than 2,400 by 2030.

The latest Nasscom-Zinnov India GCC landscape report said that the total number of global capability centres (GCCs) set up in India has increased to 1,700 in the fiscal year 2024 ending March, generating $64.6 billion in export revenue. In total, these GCCs have employed over

1.9 million people.