The pandemic affected the entire world crashed even the most flourishing industries but the IT sector continued to roar. In fact, the annual spending of the IT industry rose from 12.6% in 2019 to 13.7% in 2020. So, what made the IT and software development industry so immune to the shock? The answer is ‘Outsourcing’.

Back in the 80’s outsourcing came as a new method of expansion for organizations planning to expand their presence to further parts of the globe without a huge monetary and administrative expense. The Third World nations like India, China, Brazil, and Mexico emerged as opportunists and became hubs of the global outsourcing platform.

Despite few early shocks and a sudden rise in the attrition rate in the IT companies across the world due to the pandemic, the IT industry started growing again, the reason being the familiarity with remote working. About 300,000 jobs every year are outsourced from the US and 35% of its economy is ‘gig’, which means that the contractual and remote working in the offshoring nations was not actually new and within a couple of days the IT outsourcing was heading its way again.

India- leading the way

With a population nearing 1.4 billion, India since the early 2000’s emerged as the leading IT outsourcing services hub of the world. According to a survey by Gartner, India is the leading sourcing destination across the world, accounting for approximately 55% market share of the global sourcing industry. As of FY21, the Indian outsourcing industry is valued a $150 Billion. But what makes India a mammoth of the outsourcing world? The reasons for IT outsourcing to India are several and below are some factors accounting for why India is preferred over other countries.

Largest pool of Engineering graduates:

India has the largest resource of engineers as well as the largest number of engineering training institutes and infrastructure in the world. As of 2021, India annually produces one million engineering graduates. This means that India not only boasts of a large workforce but the one well trained in the new-age technologies as well. With an average population age of 29 years, India holds the largest population of youth in the world, which means that outsourcing to India will not only flourish but can be sustained for a long time as well.


We need to quickly understand the foremost reason for the adoption of IT outsourcing has been its cost-benefit ratio. 70% of all the organizations consort to IT outsourcing because of the cost reduction in the development of software. The Indian IT industry boasts highly talented software developers and advanced infrastructure and its low average salary delivers this advantage of expertise at a cost-effective rate. A software developer in India, receives $15,000-$20,000 annually on average, the same in USA, it could cost $100,000-$120,000 and $55,000-$75,000 annually in Canada. Additionally, since an already established infrastructure is available with the offshore providers, the startup costs are drastically reduced.

Low Attrition rates:

Due to the pandemic, the Indian IT outsourcing industry saw a rise in attrition rates. Industry leaders like the TCS, Infosys, and Wipro, encountered 18%-21% of resignations but this was still less than what the US tech giant faced at 33% from 2020 to 2021. This is major because of the Anti-Work Syndrome aggravated by the pandemic in the developed countries. Whereas in countries like India, due to the higher population and unemployment rate, such a sudden rise in resignations is barely visible.

Ease of Doing Business:

According to the Ease of Index Report 2020, India has been continuously improving on its Ease of Doing Business, particularly in the IT services sector. In 2015, the Indian government, The Digital India initiative to extend the internet and its services to every corner of the country, resulting in 450 million internet and mobile users in India, which is the maximum across the globe. Hence a much higher tech-savvy and skilled population. This has created a highly feasible environment for offshoring in India. Now with well-developed technological infrastructure and its tech-savvy population, IT outsourcing to India has a much larger workforce at service.

High-quality software development:

In India, the offshoring partners hire and maintain a dedicated team that effectively manages both development and testing, resulting in better product quality and monitoring.

More people working on the project can approach the work from many angles. The outsourced team’s diverse knowledge contributes to the development of such advanced products. Furthermore, with certain services outsourced, appropriate time can be invested into other important functions of the organization as well.

Familiarity with English:

Language has a huge role to play when comes to outsourcing of services. It is a medium of not just conversation but also of sharing information regarding the product. English being the global language becomes an important factor to be analyzed before searching for the right IT outsourcing country of your choice.

India is the most populous nation with English as its official language, which is a great advantage. This is one of the major reasons why the maximum number of tech giants and IT companies as well outsourcing partners in India are located in the southern states due to the fluency and knowledge of English found among the people of these states.

Time zone factor:

Within India and North America, there is a time zone difference of almost 10 hours 30 minutes which gives the advantage of organizations to work round-the-clock in different parts of the world, hence improving the efficiency of the work and also getting the tasks completed quicker.

Riding the wave of technological advancements is certainly possible through collaborating with Indian tech experts. The reasons to outsource software development to India are several. Below are some factors accounting for why India is preferred over other countries.

Future of IT Outsourcing to India

Outsourcing to India is one of the most common methods North American companies adhere to when searching for a viable expansion option. Considering the past trends, the Indian IT outsourcing industry is rising as always. If we look at the future predictions as well, the industry seems to grow even further.

Recently in its survey, Gartner has forecasted the IT Industry spending in India to reach a whopping $100 Billion for the upcoming year, which would result in advanced technological penetration in the Indian IT market and will lead to better opportunities not just for the Indian graduates but also for the IT outsourcing industry.

If you’re reading our blog, then you are probably in search of information about outsourcing to India and considering it as a viable option for the expansion of your organization. Companies like ShoreWise and Axcel Beck are amongst the few leaders in IT outsourcing delivering customized offshore solutions tailor-made according to the business requirements. They help in setting up a dedicated development center and a team of highly skilled and experienced IT veterans in India, for the client, on the same lines as the in-house center. They provide full support for the offshore business requirements whether it is research & development, software projects, maintenance, and support, or quality checks and testing.

ShoreWise ensures that the organizations get ready and hassle-free access to skilled resources who are well trained and skilled in IT services, software development, and ready to be deployed on client projects across the globe, thus helping save recruitment costs, efforts, and training investments.

IT outsourcing for software development and services to India can help you reap several immediate and long-term benefits including lower costs, flexibility, and greater productivity. India is the go-to destination for IT outsourcing due to its outsourcing expertise, digitally-savvy population, advanced technological infrastructure, and cost-efficient development.