Question -
Answer -
The following points will highlight the reasons that make India a favourite outsourcing destination:
1. Wage rates in India is less as compared to other developed nations and it makes MNC’s invest in Indian workers and shifts a part of the business to India.
2. Indians are educated and can be easily trained, but lack job opportunities, so job training cost will be low.
3. India is an emerging market for goods and services, the cost of production is cut by half if it is produced in India, and therefore it makes sense to invest in India.
4. India offers a stable political environment suitable for setting up businesses.
5. India has been developing the infrastructure section since the last 10-20 years and connectivity has become much improved, this helped MNC’s in reducing the cost of production.
6. India has abundant natural resources which make for a steady source of raw materials to ensure the proper functioning of MNC’s.
7. India does not have companies that can provide competition on a global basis. Hence, it easier for MNC’s to establish themselves as market leaders.