India among preferred nations for sourcing of goods

By agencies   |   Monday, 01 August 2005, 19:30 IST
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CHENNAI: India is the preferred country of U.S. and European companies planning to increase sourcing of goods and services from lower-cost nations by 85 percent over the next three years to achieve incremental cost savings, a new study says. "India was the preferred destinations, with near-shore locations forming a significant second tier. India was a valued supply market for services and information technology, but rated less highly than China in terms of cost, quality and delivery reliability", the study by global management consulting technology services and outsourcing company Accenture says. The major reasons cited for choosing India include established quality preference, good exposure of MNCs, the superiority of India in skill-intensive segments, including design capability, commitment to contract agreements, the adoption of robust accounting policies, English language usage and more cost-effectiveness than China for small and medium volumes. The study, based on a survey of 238 US and European executives, also found that 50 percent of the companies that do not currently source goods and services from lower cost countries - China, Latin America and Eastern Europe - will begin doing so in the next two to three years. Presenting highlights of the study to reporters, Associate Partner, Accenture, Sanjay Dawar said that industries differed in the levels of savings they expected to achieve. However, a majority of the industries appeared to be expecting incremental savings of around 20 percent over the next three years.