Rising Wages in India

Filed in archive Outsourcing Issues on February 28, 2007

Before, India's advantage was the lower salary rate in their outsourcing employees. This was also the reason why most companies opted to outsource in India.

As time passed by, the wage rate in India started to increase. Studies have shown that average salaries in the BPO and IT Outsourcing industry have increased. In the year 2005, the salary rate have increase to 16-18% and in the year 2006, a 13.9%. A Kelly Services study also pointed out that India is the top country that had the highest average salary increase in the year 2006.

Does this mean an end to India? Personally, I don't think so because even if the salary rate in India increases, if compared to the original rate in the US and other countries, it is still much lower. I think that the increase in India is not threatening but a sign of progress.