History of IT Outsourcing in India


Well the wheel was invented long back, spokes and new layers were added, experiments were conducted with the base materials. The question now is how one came to conceive ‘wheel’ and its potentials. Strangely all historical records claim that it was invented around 8000 BC. With the passage of time, the concept of symmetrical component in circular motion set the wheel of industrial revolution in motion.  Interestingly, what initially laid the inception for industrial revolution across the globe gradually became its integral part thereby sending ripples of growth and development in all possible and perceivable aspects of life.  Discoveries and invention follow a pattern wherein the original cause of inception becomes a part of the process of change thereby giving rise to revolutionary potentials of the ‘thing’ discovered or invented. The same happened with outsourcing, the indispensable convention of business across the globe. Typically outsourcing was a prevalent practice in ancient civilizations where working classes hired others to carry out their meager works while they focused on important functions in exchange of cash or kind.

The practice that was scattered and carried out in staggered mode got recognized way back in 1980s as an established business principle drawing multiple value propositions. The history of outsourcing in India dates back to 1980s when British Airways started conducting back office operations in New Delhi.  Global conglomerates like American Express and Texas instruments followed into the footsteps recognizing the immense potential hidden in IT outsourcing industry in India. A significant turnover happened with General Electric opening the first largest offshore operations along with a series of captive in India. Over the decade, various factors such as Y2K bug, investment in fiber optics coupled with developments in satellite communications boosted the IT outsourcing industry in India. With gradual liberalization and growth in the economy, more and more IT services started getting outsourced to India. What initially started as a mere way to “access talents and save time” transformed itself into a business strategy to optimize infrastructural resources and drive in cost effectiveness.

There were different factors that helped India become one of the major outsourcing destinations of the world.  The abundance of skilled youth with sound technical knowledge and proficiency in English coupled with the increasing trend to rapidly adopt newer technologies propelled IT outsourcing industry in India. Blue chip companies in the likes of Microsoft, SAP, and Oracle further explored and experimented with the scope of IT outsourcing in India by setting up development centers that acted as a training ground for Indian youth thereby imparting requisite skills and expertise. Moreover the value difference between the dollar, euro and Indian currency is an indispensable factor in the growth of outsourcing in India.

IT outsourcing in India basically spurred off with technical support and maintenance services with gradually progression into specialized services focusing on virtualized services and infrastructure competencies.  Apart from ITES/BPO, Interestingly outsourcing made its foray into almost every industry vertical one could think of. The change happened not only terms of inclusion of new industry verticals but also in re-modeling the service delivery models.


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