India has been ranked as the world's biggest outsourcing destination in terms of financial attractiveness and business environment.
A T Kearney's 2016 Global Services Location Index (GSLI) rated India as number one out of the total 55 countries analysed in three categories - financial attractiveness, people skills and availability, and business environment.
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India
Rank: 1
Score: 6.49
Offshoring to India remains a high attractive proposition for many companies, notes the study.
One advantage of tier 3 cities is the relative affordability of real estate as facilities in Nagpur and Ahmedabad are 25 per cent to 30 per cent cheaper than Kolkata and Delhi, the report said.
"While India and the Philippines are still top of mind when it comes to offshoring, the hunt for new talent is now taking companies beyond these countries' capitals and major cites to tier 3 locations such as Surat, Nagpur, and Lucknow in India and Bacolod and Iloilo City in the Philippines," said Nikolai Dobberstien, partner with A T Kearney's Communications, Media and Technology practice.
China
Rank: 2
Score: 6.49
China is fast catching up with India by building on educational skills and governance.
"Even though the top six or seven countries are landing in the same order this year as 2014, looking forward, this could all change radically because the very nature of what's being outsourced is changing," said Arjun Sethi, global leader of A T Kearney's strategic IT practice.
Malaysia
Rank: 3
Score: 6.05
Malaysia has a steady score in financial attractiveness, people skills and availability and business environment.
Brazil
Rank: 4
Score: 6.00
Brazil has jumped 4 places in the index due to its currency devaluation.
Indonesia
Rank: 5
Score: 5.99
One of the world’s most promising destinations in the world, Indonesia has a talented workforce, good financial profile and infrastructure.
Thailand
Rank: 6
Score: 5.92
Thailand has an educated population and scores high on financial attractiveness.
Philippines
Rank: 7
Score: 5.88
Philippines has scored high on infrastructure, environment and tax and regulatory costs.
Mexico
Rank: 8
Score: 5.87
Mexico has moved down by 4 places to be at the 8th rank. The country scores higher in financial attractiveness.
Chile
Rank: 9
Score: 5.72
Chile has moved up by 4 ranks to 9th rank in 2016.
It scores well on business environment and has a robust education system.
Poland
Rank: 10
Score: 5.68
Poland moved into the top 10 this year with good improvement in compensation costs.
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