Offshoring to India has been a popular choice for many global companies due to the country's large talent pool, low labor costs, and improving technological infrastructure. However, the key to successful offshoring lies in the establishment of robust, efficient, and sustainable industrialized processes. India's struggles in this domain have been a significant roadblock that hinders its full potential from being realized in the global value chain.
The industrialized process is a systematic approach to production that involves streamlining operations, reducing waste, and increasing productivity and efficiency. It is a critical component of the global value chain, which encompasses the full range of activities that firms and workers perform to bring a product or service from its conception to its end use and beyond. Yet, despite being a global player in sectors such as IT and pharmaceuticals, India has substantial challenges in creating and sustaining industrialized processes.
These challenges are multifaceted, encompassing infrastructure bottlenecks, regulatory hurdles, and skills gaps among the workforce. The inconsistency in power supply, poorly developed logistics infrastructure, and cumbersome regulatory policies often impede the smooth functioning of industries. Additionally, while India does have a vast pool of young workers, there is a significant mismatch between the skills required by industries and those possessed by the workforce.
While offshoring to India does present numerous advantages, these have been tempered by the difficulties faced by the country in building industrialized processes. Global CEOs should understand this as a work in progress, and have the right expectations and plans when offshoring to India, as to any country.