Rising Wages & Attrition May Ring The Death Knell Of Indian Outsourcing

If rising wages and growing attrition is anything to go by, the Indian outsourcing boom may soon be headed towards doom. The cost advantage for offshoring to India once stood at 1:6. However, today, it has come down to 1:3. Also, rising attrition and low employee loyalty have reached scary heights. More importantly, India's tech industry is primarily a services industry and not one that is inventing new technology products of its own. Thus, India's $30 billion IT/ITES services industry is slowly but surely losing its competitive advantage. If the cost advantage keeps depleting, it will soon become inefficient to use Indian labor. Already, for many Europeans, Eastern Europe has already become more compelling than India.

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