Economy

China poised to surpass India as top outsourcing destination

(Xinhua)
Updated: 2010-11-12 15:06

MANILA - China's outsourcing industry is steadily closing the gap with perennial leader India, ICT research and advisory firm Canada-based XMG Global said in its study issued on Friday.

China is closing 2010 with $35.76 billion or 28.7 percent share of the global outsourcing industry, while India maintains its lead capturing $54.33 billion or 43.7 percent of the total.

Assessing the industry's achievement, China is gradually narrowing its revenue gap from India with a huge 30 percent growth compared with India's 14 percent, XMG chief analyst Lauro Vives said in a statement.

"India's weakening lead is due to the substantial efforts of China, the Philippines, and other offshoring destinations in building their capacity to attract significant amount of investment,"Vives said.

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The Philippines, which came third with $8.85 billion in total revenue or 7.1 percent share by end of 2010, is also doing well with 23 percent growth surpassing the 20 percent gain last year, he added.

"While India continues to remain the leader, the rest of the offshore countries are now beginning to mature,"Vives said.

The analyst said the global outsourcing market is expected to end 2010 with an estimated total revenue of $425 billion or 13.9 percent higher compared with last year.

"Despite a double-digit growth, this year's accomplishment is relatively low as compared to last year's 14.4 percent growth, indicative of slow investment expansions in offshoring destinations and conservative increase in outsourcing demand from the US and European region,"Vives said.

"This is expected as most of the outsourcing opportunities, pending due to recession, are just starting to obtain green lights this year."