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The cost of operations in India can be 20-30 per cent higher than places like Vietnam or lower than places like Brazil. But part of the challenge for these countries is the lack of skills. There is a very limited set of low-end work that companies like GE are looking at and lack of quality resources makes it hard for these countries to get started.

Eastern European countries face other issues like limited pool of talent. Also, there are problems like cultural affinity, where people are not willing to move for weeks at a time to do transfer and other onsite work. Even in other locations like Brazil and Malaysia, these problems exist as people find it difficult to work late to match with the time zone of their clients.

Russia, on the other hand, is an interesting market for high-end product development and IT work, given the mathematics and engineering skills. One can expect about 10-20 per cent cost advantage in Russia as against India, depending on the cities. Also its proximity to EU helps. However, one cannot overlook the fact that some locations are slowly emerging to provide offshore work. Accenture, for example, has the largest non-Indian centre in the Philippines with over 10,000 people. IBM and EDS have 1,000 to 2,000 people in Brazil and TCS has 650 in Uruguay. Companies are setting up offshore centers outside India to mitigate geopolitical risk.

India, Brazil, Russia and China dominate a list ranking the top-30 global offshoring locations. Analyst group Gartner assessed 30 countries for their suitability for offshoring to help sourcing managers who are daunted by the task of choosing the right location. But India is singled out as setting the pace around offshore services.

According to NASSCOM, revenue from the Indian IT software and services sector, including the domestic and exports segments and excluding hardware, touched nearly US $ 40 billion during FY 2007 and is expected to grow by nearly 27 per cent to clock US $ 49 to 50 billion in FY 2008. Of this, software services remain the mainstay of the sector contributing US $ 31.3 billion during FY 2007, beating fore-casts to register a 33 per cent growth. This high dependence on exports and almost 70 per cent billing in dollar terms is a matter of deep concern for the industry, even the giants, and will force them come up with long term solutions.

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Deepak Bisht is currently working as Senior Business Analyst with MarketRx (a Cognizant company) - one of the leading KPOs based in Gurgaon, India. Prior to this, he worked with HP Analytics, Bangalore, as an Analytics Consultant for one of HP GBUs.