India’s Inflation Could Take another Big Bite From Outsourcing Dominance
Buy-side outsourcing customers are bracing for the fallout of a spiking inflationary cycle in India, which recently hit a 16-month high and outpaced 20 other leading economies around the world. India’s wholesale-price inflation rate reached nearly 10 percent in February, triggering increased angst among clients whose professional operations rely in part on a wide range of outsourced services – from the contact center to sophisticated finance and accounting functions.
Nearshore Americas heard from two separate India Inc. customers this morning who are worried that inflation will put greater strain in direct terms on the contracts they hold with providers in the region as those providers may be forced to further increase wages to keep up with the cost-of-living expenses for employees. Attrition, always a threat in an economy that is rapidly adapting to exploding demand for domestic services, is clearly a concern as employers vie for skilled professionals. Recent data indicates that wages – especially for mid to senior level executives – have risen sharply in India over the last year.
