India is losing its stranglehold as the outsourcing destination of choice as China, Morocco, and Hungary gain ground
Fewer global delivery centers were opened in India by the United Kingdom's 20 largest IT services suppliers than in each of the three countries over the last year.
The competitive Indian labor market is driving companies to alternative destinations, say Pierre Audoin Consultants (PAC) in its report.
The 20 largest U.K. companies analyzed in the report included Accenture, BT Global Services, Capgemini, Capita, CSC, EDS, Fujitsu, HP, IBM and Logica.
Of the 21 centers opened since January 2007 by the big 20, only two were in India, while four were in China, with three were Eastern Europe and Morocco respectively.
Nick Mayes, senior consultant at PAC, said there is no "serious threat" to India's outsourcing dominance in the short term but companies are looking to reduce their reliance on "India's heated labor market".
China's emergence as a global sourcing hub has traditionally been slow but the report found that BT Global Services, EDS, IBM and Tata Consultancy Services (TCS) have all opened sourcing facilities in the country in the last 18 months.
The two facilities launched in India were both outside the traditional hotspots of Bangalore and Mumbai—IBM's new center in Noida and TCS's expansion site in Hyderabad.