Offshoring to India - A strategic approach to expanding business

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Offshoring to India - A strategic approach to
expanding business India has emerged as a
predominant player as an offshore service
provider for business processes. Multinational
companies have found India as one of the most
desirable countries to do business with due to
the variety of factors like low cost,
availability of highly qualified workers, English
as the common business language, governmental
support etc. The countrys offshoring sector is
mostly ruled by the IT services sector. But
before proceeding to know about how offshoring
works, one needs to understand what offshoring
is. Offshoring is the practice of processing
business operations from one country to another
country with the motive of cutting down the cost
of doing business, enjoying tax benefits,
complying with less stringent regulations and,
quite often, exploiting the local market
potential. Manufacturers offshore the first stage
of the production of goods in another country
where the raw material and labour costs are lower
and export finished products to their own
country. Major U.S. and foreign companies have
set up businesses in India such as KPMG, Toyota,
Motorola, Honda, Nokia, Fujitsu, HSBC, Generic
Electric, American Express, International
Business Machines (IBM), Electronic Data Services
(EDS), Accenture, Toshiba, McDonald's, Pizza Hut,
Reebok and dozens of others. Companies prefer
offshoring to leverage global offshoring success
and gain business momentum. Much of the
motivation for offshoring arises due to the lower
cost of producing goods and services in an
offshore country, compared to their own country.

• Advantages of offshoring to India
• The advantages offered by the offshoring
  consultants in India are listed below-
• Cost reduction This is counted as the major
  reason why major MNCs prefer to offshore their
  business operations in India. The costs of labour
  as well as many raw materials like minerals, etc.
  in India are cheaper in comparison to other
  countries.
• Cheap and skilled workforce India has a vast
  pool of young university graduates estimated at
  17 million with 3.5 million being added every
  year, which opens the gate for getting a
  competent and cost-efficient workforce available
  in India.
• More concentration on core business The
  manufacturing consultants in
• India helps the companies by taking up the
  responsibility of or ensure proper guidance on
  the various activities related to the setting up
  of the manufacturing plant as also specifics
  including sourcing of raw materials, equipment,
  erection and commissioning, etc.

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• Complete assistance The offshoring consultants
  in India including manufacturing and sourcing
  agencies in India hold expertise in various
  domains, thus providing relevant solutions to
  problems related to the production or services
  offshored.
• Tax and benefits India provides many types of
  incentives such as tax holidays, subsidies, etc.
  to attract companies to Foreign Direct Investment
  (FDI)
• Better control Indian manufacturing consultants
  are well able to provide proper guidance for
  proper management at the project level and even
  post commissioning for regular operations
  including overseeing and regulation of all the
  companys functions if it opts for the same.
• Enlisting the benefits, offshoring to India
  offers a higher profit margin, access to niche
  talent, the opportunity to scale up sustainably,
  fewer administrative burdens, business growth
  etc. India produces 1.5 million engineering
  graduates every year spread over various
  disciplines including software and IT services.
  With English as the common business language,
  Indian engineers can communicate with general
  fluency, but can also be extremely clear and
  concise in a highly technical environment.
• Conclusion
• Offshoring helps increase a businesss output and
  possibly also improve its technical expertise,
  without undue stress, hassle or cost. Industry
  experts, a B2B sourcing platform, help in finding
  reliable manufacturing and offshoring consultants
  in India who command adequate expertise and
  knowledge to leverage offshoring for the growth
  of a companys business.