Do you think outsourcing is good for India? Why are developed countries opposing it?


Outsourcing is one of the important outcomes of the Globalization process. In outsourcing, a company hires regular services from external sources, mostly from other countries. Many of the services such as voice-based business processes, record advice, etc are being outsourced by companies in developed countries to India. Therefore, outsourcing has proved to be good for India in the following manner. 

1. Employment Generation : Outsourcing from developed nations has helped in creating more employment opportunities in India. It has resulted in generation of higher paying jobs that utilize the skills of educated youth of India. 

2. Increased Foreign Investment: Successful execution of processes outsourced to India has increased India’s international credibility and hence the inflow of foreign capital to India.

 3. Promotes: Other sectors outsourcing creates various backward and forward linkages which make it beneficial for other related sectors like industrial and agricultural sectors too. 

4. Human Resource Development: Outsourcing has helped in developing human resources by draining the youth and imparting skills required for specific jobs that have high remuneration.

 5. Rise in Standard of Living : Outsourcing has improved the standard of living of the people in India by generating more and better employment with a rise in average salaries. Outsourcing is beneficial for India but developed countries oppose this because outsourcing leads to the outflow of capital from the developed countries to the developing countries, further, outsourcing leads to a reduction in employment in the developed countries as the same jobs are outsourced to the developing countries where these are done at relatively cheap wage rates.

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