chapter  12
23 Pages

Outsourcing and offshoring to India

ByCHARMI PATEL AND PAWAN S . BUDHWAR

With an average growth of GDP of 6.2 per cent (in the last decade), an inter - national exchange seven times larger than in 1991 and a value of investments more than thirty times greater, India is the second best economy in the world (after China) for its growth rate (Nassimbeni and Sartor, 2008). In fact India’s GDP at 9.4 per cent was the second fastest-growing GDP after China in 2007-08. As per Reserve Bank of India (RBI), India’s actual outbound foreign direct investment (FDI) in 2007-08 was an estimated US$ 17,436 million, an increase of 29.6 per cent over US$ 13,454 million in the previous fiscal year (NASSCOM1 Newsline, 2008). India is the fifth largest economy on basis of GDP calculated on purchasing power parity (PPP) basis (CIA, 2009). One of the key industries that have propelled this rise and growth is that of information technology (IT). It includes a vast range of activities, from IT-enabled services (ITes) to development and maintenance of software. What was, at first, the externalization of singlular activities has now become a phenomenon involving entire processes: business process outsourcing (BPO).