India has emerged as one of the leading offshore software development center and according to some sources India’s software exports are growing at the pace of 30% per Annam. The growth of India’s prowess in IT sector and numerous US IT firms coming to India for offshore software development can be understood from the fact that various state governments in the USA have prohibited outsourcing of any such work to Indian IT firms. The protectionist approach from the state governments in the USA is against the maxim of free trade among nations.
Whereas the cost-efficiency of offshore software development attracts IT companies in the USA to India, legislative measures are against it for various political and economic reasons. Massive unemployment in the USA is a major debacle in the process of offshore software development as governments in the country cannot deny the fact that the US firms should generate employment for their nationals and not to other nationals; however, it is pure principle of business that companies are in the business for profit which can be gained only when production cost is reduced.
A number of firms from the USA have not complied with the legislative measure or regulation and still believe in offshore software development. Major MNCs such as Eli Lilly, P&G, Henkel, Dow AgroSciences, Novartis, etc. have their offshore software development centers in India despite the deliberate attempts from various governments in the USA to prohibit them from offshore software development in India. Various research and development centers in India are catering to a varied range of software development need for their clients in the USA and Canada.
Custom software forms a major part in the entire offshore software development in India and a major reason behind its happening here is that some IT companies have gained expertise in development of custom software over years of experience. Similarly, some other allied software development services such as maintenance of the software, project management, mathematics, engineering, etc. too are being offered by IT firms located in New Delhi, Bangalore, Chennai, Hyderabad, Mumbai, etc. Noida and Gurgaon in India have emerged as major hubs for offshore software development in India.
New studies show that India may lose its place as a primary offshore software development center to countries such as Russia, China, Philippines, or Brazil for the reason that these countries too have started offering cost-effective IT services which are comparable to India’s or even cheaper than India’s. Therefore, it is high time for Indian IT firms to reschedule the entire gamut of offshore software development program and review the offerings vis-a-vis cost.