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Growth 'phenomenon' in offshore services keeps India in lead

With its strong IT labor pool and government support, India continues to dominate the offshore services scene in the Asia-Pacific region.

With its strong IT labor pool and government support, India continues to dominate the offshore services scene in the Asia-Pacific region, according to a new Gartner report.

The report, published in February but released Thursday, identified China as the most prominent challenger to India's top position because of its huge potential. A number of emerging countries such as Vietnam, the Philippines and Malaysia, which have attractive cost structures, also show promise, said Gartner.

"India continues to lead in this market because we won't see another Asia-Pacific country displaying the same growth phenomenon as it has," said Jacqueline Heng, Gartner's research director for business process services, in a phone interview. "This is down to factors such as its predominant English-speaking base, strong government support and political stability."

Australia, New Zealand, Singapore, Thailand and Indonesia made up the rest of the top 10 offshoring locations selected by Gartner. For the study, the research firm assessed the capabilities and potential of 30 countries based on 10 categories, including language proficiency, government support and availability of skilled labor pool.

While India continues to grow in terms of revenues from the export of IT services, the Gartner report noted that its relative share of the worldwide market has declined marginally. This is because other countries are investing heavily in an effort to gain more market share, while enterprises are also engaging in "derisking strategies"--spreading out their outsourcing activities in a portfolio of countries besides India, according to the study.

For more of this story, read Growth 'phenomenon' in offshore services keeps India in lead on ZDNet Asia.