Why is India Ruling the IT Service Outsourcing Market?

IT Service Outsourcing

As digitalization is becoming popular, more businesses are resorting to technology to sustain themselves in the market. This, in turn, has increased the demand for digital technologies like websites, mobile applications, desktop apps, and more.

Moreover, it is commonly known that present-day consumers are tech-savvy and prefer digitally present brands over the ones with just a physical presence. In order to meet the dynamic market trends, businesses are investing in digital technology development.

Out of all the ways to develop a digital platform, outsourcing is one of the most popular approaches. However, what is development outsourcing, and how will it benefit a business? Let’s find out in the upcoming section.

What is Development Outsourcing?

You must know that there are different ways to build a digital platform. Different options yield different results and largely impact the end quality of the digital product. To elaborate, one can develop a platform by:

Out of all the above-mentioned development approaches, outsourcing is the most popular one. Here, a business appoints an external institution/ person to undertake the platform’s development on its behalf. Generally speaking, it is either a development outsourcing agency or a freelancer/ team of freelancers to build their product.

Many businesses are unaware of the difference between hiring an outsourcing agency and a freelancer. Therefore, they are incapable to make the right choice and get the most out of outsourcing. The following section will cover this difference in detail.

Outsourcing to Agency vs. Freelancer: A Million Dollar Question

Whether you should appoint an outsourcing agency for your project’s development or hire freelancers is a choice that depends upon numerous aspects.

These options are two sides of the same coin and have the capability to influence the overall quality of your product. As a result, it is essential to understand the characteristics of both of these approaches before making a choice.

The following infographic will provide a detailed difference between hiring an agency and a freelancer for your platform’s development.

Outsourcing to Agency vs. Freelancer

Generally speaking, businesses choose to hire freelance developers to cut down on the overall cost of developing a platform. However, this often results in compromised quality of output and a less efficient development process. On the other hand, appointing an agency to develop your platform guarantees that you benefit from a vast talent pool and finish your project within the least possible time and with optimal quality. As a result, choosing an agency to develop your digital product is a more viable option as compared to choosing a freelancer.

Regardless of whether you choose to hire an agency or a freelancer for your project when you outsource your platform’s development, you will also have to choose the development approaches, which are onshore, nearshore, and offshore development.

Let’s understand what these approaches are in detail in the next section.

Onshore vs. Nearshore vs. Offshore Development

Onshore Development

Here, businesses choose an outsourcing agency/freelancer located in the same country as theirs. Choosing an onshore agency enables the business to seamlessly coordinate with the developer team and communicate their requirements.

However, depending on where your business is located, this approach can be a cost-intensive affair. This is because the development rate in certain countries, for instance, the USA, can be as high as $150/hour.

Nearshore Development

In the nearshore approach, businesses outsource their development requirements to developers located in their neighboring countries. For example, if your business is located in the USA, you can outsource your development requirements to developers in Canada following the nearshore approach.

Since the development team is located in neighboring countries, a business experiences no to minimal language barriers and time zone differences. However, there is no guarantee of significant cost optimization in nearshore development. Moreover, it can be challenging for business owners to visit the developers, as both parties are located in different countries.

Offshore Development

Here, a business can choose a development agency located anywhere in the world except in its own country and the neighboring countries.

For example, a business based in the US hiring an India-based development agency/ freelancers can be said to have taken the offshore approach. This approach is known to largely optimize the cost of developing a digital platform. Moreover, when implemented correctly, it can even enhance the overall quality of your digital product.

Speaking factually, India is one of the leading locations for businesses to outsource their development requirements. The market value for IT service outsourcing in India is expected to reach USD 8,830 billion by 2025.

However, what makes India the top choice among businesses looking to outsource their digital product development requirements? Let’s find out the answer to this question in the upcoming section.

Read more: Software development team: structures, approaches, and characteristics

Why Is India a Popular Destination for Development Outsourcing?

Benefits of Development Outsourcing


India is one of the most cost-effective locations to outsource your product’s design and development. With development rates as low as $15/hour, you are certain to optimize your project’s cost investment by choosing Indian agencies/ freelancers for your product’s development.

The cost optimization factor is especially evident for businesses based in first-world countries like the USA, Canada, Australia, the UK, Switzerland, etc. This is because these countries are known to have some of the highest hourly development rates across the globe, and sometimes, hiring a domestic development agency can turn out to be an impractical investment.

High Tech Expertise

India is known to be the global IT hub and is home to some of the leading IT experts. This is because India has promoted education in science and technology for the past many years. Moreover, the country has gained high technology expertise owing to its unparallel focus on technology research and development.

Owing to these factors, outsourcing your project’s development to Indian developers ensures that your product is developed using the latest technologies. This, in turn, results in higher product quality and world-class usability.

Large Talent Pool

India has been actively promoting STEM (Science, Technology, Engineering, and Mathematics) education for the past many decades and has some of the globally leading IT colleges and universities. Resulting from this, the country is home to some of the most skilled engineers and a vast talent pool. 

When you outsource your development project to Indian agencies/ freelancers, you can benefit from the top-tier expertise of these engineers. Moreover, selecting developers from IT-hub Indian cities will further ensure that your project is in the right hands, delivering top-of-the-class results for your project.

Top-class IT Infrastructure

India is one of the most rapidly growing economies across the globe. Moreover, being a global IT leader, India is known for its seamless digital network and exceptional quality internet. Therefore, it is safe to say that the country has a robust IT infrastructure.

This enables the developers in India to create high-performing and world-class digital products for their clients. Consequently, choosing Indian development agencies is an optimum option to get top-quality websites, mobile apps, desktops, and other digital technologies for your business.

Minimum Time to Market

The high technological expertise, state-of-the-art IT infrastructure, and vast talent pool contribute to a seamless development process. By choosing developers based in India, you can reduce your product’s time to market and ensure a faster launch.

This is especially the case when you choose Indian development agencies over freelancers. This is because these development agencies hire numerous specialists in different departments, further boosting your product’s quality and reducing the development timeline.

Seamless Communication

Seamless communication makes it easy to finish the project within a limited time frame. You must know that India is the world’s second-largest English-speaking country, with more than 125 million English speakers. The numbers are constantly rising every day, as more and more people are realizing the importance of learning the English language to gain international business.

As a result, when you outsource your development requirements to India, you are certain to benefit from seamless communication. Moreover, numerous Indian development agencies have started working in their client’s time zones to further ease the communication gap arising from time-zone differences. This will guarantee effortless and uninterrupted communication between you and the development team.

Stable Government Policies

The Indian government has recognized the potential of India as the leading outsourcing destination long back and has worked to achieve the same. This aspect is often missing in other countries that are popularly known for IT service outsourcing.

The Indian government has initiated a National IT Task Force that aims to increase the scope and quality of the nation’s IT services and further grow the tech sector. Moreover, the country has excellent cyber laws that protect digital exploitation, further adding to your digital products’ security and overall quality.

You must know that your business can gain all the above-mentioned benefits of outsourcing to India by choosing a development agency over freelancers.

However, it can sometimes be challenging to find the right development agency. The following section will cover the complete process of finding a design and development outsourcing agency.

Step-by-step Process to Hire an Indian Development Agency

Hire an Indian Development Agency

Search for Agencies Online

The first step to finding a development agency is to use search engines like Google and fire search queries.  These search queries will help you get a list of all the top agencies in any given location. Generally speaking, the top 30 listings on the search results are ideal to consider for your project.

For example, to find development agencies from India, you can fire the below-given search queries:

  • Top development agency in India
  • Best Indian development agency
  • Leading design and development company in India

These are just a few examples of search queries. This step will enable you to collect a pool of potential development agencies.

Alternatively, you can also search for development agencies on portals like Clutch and GoodFirms. Most of the leading design and development agencies enlist themself on these platforms. All you have to do is select the type of IT service you are looking for and add your preferred location.

Check Company Profile

Once you have found a list of all the leading companies in your desired location, which in our case, is India, you can visit their website one by one and check their portfolio. This will enable you to check the company’s skills and expertise in the design and development field and will give assurance on their quality of work.

Additionally, you can also browse through the company’s testimonial page and get an insightful look at their previous client’s working experiences.

Also, make sure to visit the website’s service page and read about their services in detail. This will help you to gain a better understanding of what you will gain from the project.

Shortlist Companies

Here you have to shortlist the companies based on their profile, services, testimonials, and, most importantly, portfolio. This step is essential to cut out the companies that are not providing services as per your requirements.

Shortlisting companies will enable you to get the best of the best development agencies and boost your project’s success prospects. 

Send Requirements

Once you have shortlisted the agencies based on their capabilities and profile, it is time to send in your requirements and receive their inputs. Based on your requirements, the development agencies will research the features and will revert back to you with their offerings.

Here, it is a good idea to sign a mutual NDA (Non-disclosure Agreement) to protect the integrity of your ideas. This will ensure that your idea is not copied and remains unique. 

Select Company

Once you have received the shortlisted company’s inputs, you must examine and further shortlist companies. You can judge the offers based on the number and type of features, development timeline, development cost, etc.

You must know that sometimes, the initial investment in developing a digital platform can be high. However, the investment is beneficial in the long run as there is high ROI. In case you want to optimize the cost of your platform development project, you can go for MVP development. This will guarantee the best output at a minimal cost.

Sign Contract

Once you have selected an agency, it is time to sign the contract and finalize the deal. The selected agency will immediately start working on your project once you have signed the contract.

You must know that certain agencies also give you a choice on the type of model you want to select for your digital product’s development. Some of the most popular models are:

  • Hiring dedicated developers
  • Fixed cost
  • Hourly basis model

You can consult the selected agency to find the most suitable model for your requirements.

Summing It Up

We are sure that by now, you are clear on the topic ‘Why India is the top outsourcing destination across the globe. The benefits of outsourcing your IT service requirements to India are many.

By choosing the right development approach and hiring the right type of development team, you are certain to impart these benefits to your digital platform development project.

Lastly, follow the right process to hire a design and development outsourcing agency, and you are good to go to optimize the overall quality of your project.


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