11 Reasons Why IT Outsourcing in India is the Best Decision [2025]

India has emerged as a global tech and outsourcing hub, leading the india outsourcing sector with its vast resources and innovative solutions.

Amidst all this, outsourcing in India has emerged as the most viable choice. Today, businesses are shifting their attention to enhancing their operations in centers located in India to increase profitability.

Experts say that 30-40% of technology jobs lost globally may be outsourced to India.

Big tech companies in India have increased their workforce by 35% in the past year, compared to a global increase of only 12%. India now accounts for 17% of their staff.

But it is not just IT outsourcing that India has proved its metal in. Tech companies like Apple, The Hub Engineering, Samsung, Kia, Boeing, Siemens, and Toshiba are moving their manufacturing lines to the country; India is also on its way to becoming an outsourcing hub for tech manufacturing.

"India looks like a bright spot in particular because you're seeing tech companies starting to move forward in terms of manufacturing in India," says Michael Yoshikami, Ph.D - CEO and Founder of Destination Wealth Management and Chairman of DWM's Portfolio Strategy Committee.

Today, the world no longer looks at India as just a cheap alternative to hiring skilled resources but as a hub for expanding its footprint in emerging technologies like AI, ML, Blockchain, cloud computing, etc.,

The recent Indo-US collaboration fosters tech sharing, co-development, co-production, and adapting regulation among industry, government, and academic institutions. 

The focus industries for collaboration are defense, clean energy, telecommunications, emerging technologies like AI, quantum technologies, cybersecurity, sustainability, biotechnology, space technologies, and semiconductors, proving India's stronghold in tech space.

If you are still in two minds about why ‘outsourcing to India’ is for you? Keep reading.

Introduction to Business Process Outsourcing in India

Business Process Outsourcing (BPO) in India has become a cornerstone of the country’s economic growth and global reputation. Over the past few decades, the Indian government has actively supported the expansion of the outsourcing industry through favorable policies, infrastructure development, and incentives for both domestic and international companies. This proactive approach has enabled India to become a leading outsourcing destination, attracting a diverse range of outsourcing companies from around the world.

The BPO sector in India has evolved far beyond its early days, now encompassing a wide array of business processes such as software development, customer support services, finance, HR, and more. Indian companies, including industry giants like Tata Consultancy Services (TCS), have set global benchmarks by delivering high-quality outsourcing services to clients across continents. The Indian software industry, in particular, has played a pivotal role in driving the growth of the BPO sector, offering expertise in cutting-edge technologies and robust business process management.

India remains a preferred choice for international companies seeking a competitive advantage. The country’s vast pool of skilled talent, cost effectiveness, and strategic time zone differences allow businesses to optimize operations, reduce expenses, and ensure round-the-clock productivity. As the BPO sector continues to expand, India’s reputation as a global hub for outsourcing services only grows stronger, making it the go-to destination for companies looking to streamline their business processes and achieve sustainable growth.

11 reasons why IT outsourcing in India is the best decision

Today, India has become the outsourcing hub for businesses worldwide, from IT to tech manufacturing. Choosing the right outsourcing provider is crucial, as it ensures alignment with your company's cultural and operational needs. Indian service companies play a significant role in the outsourcing ecosystem, offering expertise and cost advantages across various industries. Here are the top 11 reasons ‘Why is India well suited for outsourcing’ & ‘What makes it the top destination among its peers’

1. The largest talent pool of professionals

Access to a large talent pool across technology is one of the top reasons to outsource IT services in India. According to the latest data by Statista, there are 27.7 million developers worldwide, 5.4 million are Indian. Today, India has the largest population (19%) of software engineers globally and has surpassed the USA, which has 4.4 million software developers. The Indian workforce is recognized for its scale and skill, offering a vast, highly qualified talent pool that makes India a leading destination for outsourcing.

India annually adds an average of 1.5 million software developers to its population. With 2500 engineering colleges, 1400 polytechnics, and 200 schools of planning and architecture, India has strategically invested in growing its tech talent to become the world's outsourcing hub. Indian teams are known for their collaborative strengths, adaptability, and ability to deliver quality results in global projects.

According to the study by Korn Ferry on Global Talent Crunch, India would be the only nation with zero talent deficit in technology, media, and telecommunications. 

2. Cost-effective resources available at flexible pricing models

Even after three decades, cost-effectiveness is one of the biggest advantages of outsourcing to India. The latest Glassdoor data on software engineers' per-hour salaries shows that hiring a full-time programmer in the USA would cost a company $91,156/ annum. It is ten times more than hiring a full-time developer in India at $ 9751/annum. Cost reduction is a key benefit, as outsourcing to India allows companies to significantly lower labor and operational expenses while maintaining high quality.

Being a developing nation, the cost of living in India is much lower than in the USA and other developed countries. 

According to the Numbeo database, Consumer Prices (Including Rent) in India are 317.1% lower than in the USA.

So, whether you wish to hire developers or create a full-fledged office infrastructure, outsourcing in India can save you up to 3x of the cost you would spend in the US. Offshore teams in India play a crucial role in reducing expenses and improving overall profitability for businesses.

Besides, you get multiple engagement models to choose from while outsourcing work to India. You can select an outsourcing partner, hire offshore developers, hire freelancers, or build your in-house remote teams.

You also get the flexibility to decide whether you wish to hire them on a fixed cost, monthly retainers, or hourly rate, depending on the requirements of your project. Indian outsourcing companies offer flexible pricing options, allowing businesses to manage budgets efficiently with hourly, weekly, monthly, or per project payment structures.

Learn about the various models of hiring remote developers and how to choose the right one

3. Consistent and high-quality services

India's skilled workforce is complemented by exceptional service delivery. Its software developers leverage cutting-edge technology, software, and infrastructure to gain a competitive advantage.

Indian outsourcing companies adhere to the highest international standard practices, which include a wide range of bpo services that cover business process outsourcing activities across various sectors:

• The International Organization for Standardization (ISO) implements Total Quality Management (TQM) to ensure high-quality design, development, production, and installation.
  
• Six Sigma Quality certification
• Customer Operations Performance Center (COPC) ensures the timely delivery of high-quality software.

Besides, India's IT industry is a leader in AI skills, with the second-largest pool of AI/ML BDA talent worldwide and the third-highest number of Cloud professionals.

India's software companies are highly skilled in advanced technologies and provide precise and top-quality services, making India a smart choice for programming outsourcing.

Quickly determine your outsourcing ROI with our cost calculator and its impact on your overall budget.

4. Time-zone advantage

If you are a USA-based company seeking 24/7 monitoring of your IT operations, outsource to India. 

The time difference between India and New York, USA, is around 9 hours and 30 minutes. So when it is time for your in-house team to clock out, your Indian team clocks in and takes over the project. 

This ensures that you have 24/7 support on your ongoing operation, empowering you to maximize accomplishments in a normal work day, which would not have been possible if the work were done locally. Offshore outsourcing to India allows businesses to strategically leverage different time zones, ensuring continuous workflow and improved service quality.

5. Cultural compatibility

Since the early ’90s, India has been considered an outsourcing destination for back-office operations.

India's outsourcing industry began with outsourcing back office work by global airlines, which IT companies then followed. Texas Instruments, American Express, Swissair, British Airways, and GE were among the first companies to enter the Indian outsourcing market.

Being an IT outsourcing destination for over three decades has made India adaptable to international work culture. Thus, cultural compatibility is one of the biggest benefits of outsourcing to India. 

Indian tech companies have successfully adopted a Western business model and culture. However, understanding and bridging cultural differences is crucial in outsourcing relationships, as these differences can influence business practices and expectations. They understand the work environment and train their teams, making them more adjustable to Western culture.

In addition, Indian programmers possess empathetic qualities and strong interpersonal skills. Unlike their Western counterparts, they are willing to assist beyond their regular working hours for the projects they are involved in.

A Nasscom study shows that 50% of Fortune 500 companies choose Indian outsourcing service providers. 80% of US and European companies prefer outsourcing services to India and rank it as their top choice for its ability to provide highly skilled professionals with great work ethics.

6. Transparent communication 

When you outsource to India, you get end-to-end transparency in outsourced operations. Your IT outsourcing in India starts with an SLA (Service Level Agreement) that establishes communication protocols, response times, and performance expectations to ensure accountability. 

Indian outsourcing companies prioritize Agile and Six Sigma methodologies for transparent communication and stakeholder involvement in project development.

They use advanced reporting systems to monitor project progress and share reports with clients to ensure transparency and open communication about any challenges or delays. These processes are supported by robust communications systems, which form the technological backbone for transparent and efficient information exchange.

By using appropriate communication channels and project management tools, Indian companies ensure streamlined collaboration and documentation. 

7. Favorable government policies toward the IT industry

The Indian government has taken various steps to promote the growth of the country's Information Technology and Information Technology Enabled Services (IT/ ITeS) sector. The following are some of the measures that have been put in place:

• In the Union Budget 2023-24, the IT and telecom sector allocation stood at Rs. 97,579.05 crore (US$ 11.77 billion).

• The government introduced the STP Scheme, which is a 100% export-oriented scheme for the development and export of computer software, including the export of professional services.

• In August 2022, the Indian Computer Emergency Response Team (CERT-In), in collaboration with the Cyber Security Agency of Singapore (CSA), teamed up for a successful cyber security exercise called "Synergy" in August 2022. It focused on increasing network resilience against ransomware attacks and involved 13 countries.

• India Government has also approved 22 new STPI centers across the country.

• GoI approved the National Policy on Software Products-2019 to establish India as a global hub for software products through innovation, sustainable intellectual property, improved commercialization, and promotion of technology startups.

• GoI has approved Next Generation Incubation Scheme (NGIS). It aims to create a dynamic software product ecosystem to support the IT industry, drive growth, create jobs, and increase competitiveness.

The Indian Government has launched several initiatives to make India's IT sector a leader in technological advancement.

8. Great infrastructure

India's economy is growing rapidly, and its advanced infrastructure incorporates cutting-edge technology in all sectors. India's GDP is now the fifth-largest in the world, surpassing the UK, France, Canada, Russia, and Australia, with a value of $3.7 trillion.

The Indian government has strategically invested in growing IT outsourcing to India. Today India is home to 63 STPI (Software Technology Parks of India) and 1500 GCCs (Global Capability Centres). Many of its cities have access to the latest equipment, software, and 5G high-speed internet, which enables uninterrupted client support and communication. In addition, India’s well-developed telecom and cellular networks across major cities ensure reliable connectivity and smooth communication for outsourcing services.

Owing to favorable FDI and Import and export policies, India is ranked 10th for ease of business in the latest survey from Economist Intelligence Unit Business Environment Rankings (EIU BERs).

9. The quickest time-to-market

IT outsourcing in India empowers you to reduce a product’s time-to-market substantially. India's time zone significantly overlaps with North America and Europe. It enables round-the-clock development and reduces project completion time manifold.

Also, the availability of a large talent pool across technologies at cost-effective prices provides you the flexibility to scale operations for faster development cycles.

Being a global tech hub with an advanced IT sector and startup ecosystem, outsourcing to India offers access to cutting-edge tools and practices, including the use of digital platforms that accelerate development and time-to-market.

10. Proficiency in English

Communication is the core of successful project outsourcing, and sharing a common language is the key to seamless communication. 

So, If you are wondering ‘Why do companies outsource to India?’ No language barrier is one of the reasons. 

India has the second-largest English-speaking population in the world. The Indian education system teaches English as a primary language. The education in higher studies, especially in STEM fields, is in English. Thus, Indian developers have higher language proficiency than their Chinese or Filipino counterparts. 

Besides, India prides itself on its state-of-the-art IT infrastructure and 5G band connectivity, making IT outsourcing in India a seamless experience for companies across the globe.

11. Focus on the core business competencies

Business growth demands continuous focus on increasing the customer base or researching and testing new products while maintaining the current growth rate. Entirely depending on in-house may take your focus away from core business activities.

Outsourcing to India lets you delegate noncore activities while continuously managing the business functions that make you thrive in the competitive ecosystem. Many companies choose to outsource back office support functions such as data management, content moderation, transaction processing, and security services to improve efficiency. India is a wider outsourcing location where you can effortlessly find a service provider for any business activity you would prefer to outsource.

Also, read: In-House vs. Outsourcing – Everything You Need to Know

Data Security and Management: Safeguarding Your Business

When it comes to outsourcing, data security and management are top priorities for any business. Indian outsourcing firms understand the critical importance of safeguarding business operations and have invested heavily in robust security frameworks. The Information Technology Act in India provides a legal foundation for data protection and recognizes electronic contracts, ensuring that digital agreements and transactions are legally binding and secure.

Leading service providers in India implement advanced security measures such as encryption, firewalls, multi-factor authentication, and strict access controls to protect sensitive information. These protocols are designed to prevent unauthorized access and ensure the confidentiality and integrity of client data throughout the outsourcing process. However, it is essential for companies to conduct thorough due diligence when selecting an outsourcing partner. This includes evaluating the provider’s infrastructure, technology stack, and data management processes to confirm they meet international standards for data security.

By partnering with reputable Indian outsourcing firms, businesses can confidently entrust their information technology and business operations to experts who prioritize data security. Clear communication, comprehensive service-level agreements, and adherence to the Information Technology Act further reinforce the trust between clients and service providers, making India a reliable choice for secure and efficient outsourcing.

BPO and Back Office Services in India: Beyond IT Outsourcing

India’s outsourcing sector extends well beyond IT, offering a comprehensive range of BPO and back office services that support global business operations. From data entry and data management to customer support services, Indian companies have built a reputation for delivering reliable and cost-effective solutions. The country’s vast pool of skilled talent, combined with a significant cost advantage, makes it an attractive destination for companies seeking to outsource their back office functions.

Major cities like Bangalore, Mumbai, and Delhi have become thriving hubs for the BPO industry, hosting numerous service providers that cater to international clients across various industries. Indian professionals excel in areas such as mobile app development, software development, and customer support, consistently delivering high-quality results that help businesses maintain efficiency and focus on their core competencies.

The Indian government continues to play a vital role in nurturing the BPO sector by offering incentives and creating a business-friendly environment. These initiatives have encouraged both established firms and startups to expand their operations, further strengthening India’s position as a global leader in back office services. Whether it’s managing large-scale data entry projects or providing multilingual customer support, Indian companies offer the expertise and scalability needed to meet the diverse outsourcing needs of businesses worldwide.

How to find a good outsourcing company in India?

Search for companies that meet your project requirements when planning to outsource in India. Look for firms with impressive track records, positive reviews, and a varied portfolio of successful projects. Additionally, seek recommendations from colleagues, business networks, or industry forums to gain valuable insights and referrals. Consider reputable BPO companies, as they often provide customer service, call center, and data processing services with stringent security measures and self-regulation practices.

This exercise will help you find and shortlist the right companies for outsourcing your IT project.

• Evaluate Experience and Expertise:

In this step, you are required to evaluate the expertise and specialization of the shortlisted companies. Take into account their experience in your industry or a specific domain. It is advisable to select companies with a successful track record of delivering projects similar to yours, as this indicates they will better understand your requirements and challenges. Choosing an outsourcing provider that aligns with your business’s cultural and operational needs is essential for a successful partnership.

• Quality and Certifications:

Verify the quality standards and certifications of the companies to see if they follow best coding practices. Look for certifications such as ISO, CMMI, or industry-specific accreditations that show their dedication to quality and adherence to global standards.

• Communication Skills:

Clear communication is crucial when working with an outsourcing partner. Look for a company with good English language skills, dedicated project managers, and transparent reporting channels for effective collaboration.

• Infrastructure and Technological Capabilities:

Evaluating the infrastructure and technological capabilities of the companies you are considering before outsourcing your project is essential. Ensure they have the hardware, software, and security measures to handle your project requirements. Check what project management tools and communication setups they use to ensure a seamless exchange of information. Inquire about their ability to adopt emerging technologies and tools relevant to your project.

• Check Client Referrals:

Request client references and project case studies when choosing outsourcing companies. Connect with their past clients and inquire about their experience to ensure the reliability and punctuality of a company. Additionally, reviewing the company's case studies or success stories can provide insight into their problem-solving and project management abilities. Many foreign companies have shared their experiences with Indian outsourcing partners, highlighting both the benefits and the legal or regulatory challenges they have faced.

• Evaluate Security Measures:

Data security and IP protection become major worries for companies outsourcing IT services. Ensure the outsourcing company follows legal and regulatory requirements to avoid data infringement. 

Review their data protection policies regarding intellectual properties (IPs). Evaluate the security setup and information safety measures deployed by the company. Assess their contracts, service-level agreements, and NDAs (Non-disclosure Agreements).

• Financial Stability:

You can evaluate the company's stability based on its financial reports and years of experience operating in the market. These two factors will give you a clear picture of the company has grown since its inception. 

The steady upward growth indicates that the company is fairly stable and can power your project development.

• Site Visits and In-person Meetings:

Plan on-site visits and meet them in person to better understand the outsourcing companies. This way, you can comprehensively understand their work environment, team interactions, and working methodology, allowing you to see if they fit your organization's work culture.

• Contract and Ongoing Support:

Once you've selected an outsourcing company, draft a comprehensive contract covering all aspects of your project, such as expectations, timelines, payment terms, and dispute resolution methods. Including support and maintenance services in the contract is critical to address any potential issues after the project is delivered.

Despite listing the best practices, the vast Indian outsourcing landscape can still leave a startup or a newcomer clueless about outsourcing to India.  

So, here is a list of the Top 10 IT Outsourcing Companies In India in 2024  to ensure you get a seamless experience when outsourcing in India.

Why Your Team in India is your trusted IT outsourcing partner?

Ranked among India’s best IT outsourcing companies, YTII helps businesses such as yours augment their tech teams with highly skilled and experienced professionals. With extensive experience in offshore BPO, YTII is a trusted partner for companies seeking reliable offshore business process outsourcing solutions.

When you choose YTII as your outsourcing partner, you get

• 13+ years of industry experience 

• A pool of 200+ pre-vetted Indian programmers across technologies and domain expertise

• IT infrastructure with enterprise-grade security in place

• Extensive SLAs and NDAs to ensure data and IP protection

• English proficiency and transparent communication

• Quick resource replacement and efficient handling of customer calls to address support needs

• Continuous resource mentoring by tech experts

IT outsourcing no longer remains daunting if you have a trusted partner like (YTII). YTII helps you mitigate the challenges of working in an offshore environment, navigating you to success. 

Frequently Asked Questions