Global firms favor India for digital outsourcing, says study
NEW DELHI, INDIA — A recent study by the industry body NASSCOM and management consulting firm Avasant revealed that India continues to solidify its position as the go-to destination for global companies looking to enhance their digital services offerings.
The report noted that over 50% of companies in various sectors—including travel and transportation, telecom, media and entertainment, and construction and engineering—prefer India for their digital service needs.
Optimistic outlook amid digital transformation
The NASSCOM-Avasant report, based on a survey of 550 enterprises across 11 major sectors and seven geographic regions, showed an optimistic outlook for the digital services sector.
Approximately 68% of global firms anticipate an increase in client demand, while 80% expect revenues to either maintain current levels or increase in 2024, despite pricing pressures.
The report also highlighted a significant rise in the number of firms with a dedicated digital workforce, indicating a surge in digital talent emphasis propelled by advancements in Generative AI.
Nearshoring trends and investment boost
The study also shed light on the growing trend of nearshoring, with approximately 45% of high-tech and travel companies and 41% to 43% of telecom, discrete manufacturing, and construction firms choosing India for their digital endeavors in 2023.
This move towards nearshoring, which involves outsourcing to nearby countries, highlights India’s strategic advantage in the digital landscape.
Moreover, the report indicates a significant uptick in investments in digital services by global firms, with around 90% planning to increase their investments in key digital technology areas such as AI, ML, big data analytics, cloud computing, cybersecurity, and intelligent automation in 2024. This is a testament to India’s growing influence and capability in the global digital services sector.
The importance of digital talent development
Nasscom Senior Vice President and Chief Strategy Officer Sangeeta Gupta emphasized the need for a strategic framework to accelerate digital adoption.
“Prioritising the development of digital talent within organizations is essential to ensure the workforce can effectively leverage AI and other advanced technologies,” Gupta stated.
This focus on talent development is crucial as the adoption of Generative AI is expected to expand significantly in 2024, with a shift towards cybersecurity anticipated by the first half of 2025.
