Over 75% MNCs prefer India for outsourcing: CBRE survey

BANGALORE, INDIA - APRIL 11: (ISRAEL OUT) A man talks on his cellular phone, on April 11, 2008 in Bangalore, India. Many residents work for multi-national cooperations and the economy is booming. New construction for offices is under way. Shopping malls open frequently and the shops are full of western merchandise for workers with high disposable income. India's new middle class is about 300 million, and growing. (Photo by Uriel Sinai/Getty Images)

Buoyant economy, regulatory reforms has made India the most preferred market for outsourcing business among more than 75 percent multinational companies, says a survey.

However, higher costs and economic uncertainty following the introduction of demonetisation at the end of last year as well as the impact of the new US administration were found to be concerns with the MNCs, according to the survey carried out by leading real estate consulting firm CBRE.

"More than 75 percent of the multinationals consider India as preferred market for outsourcing," the survey said.

The analysis largely focuses on the responses received from the 50 multinational respondents.

As per the findings, Bengaluru, Mumbai and Delhi NCR have emerged as the most preferred destinations for expansion by the companies.

"Corporates displayed strong intentions to expand in tier 1 cities with the technology and outsourcing hub of Bengaluru receiving the strongest interest," CBRE said.

It also noted that with IT firms in Bengaluru growing larger, an increasing number of companies are opting to expand in tier II cities such as Chennai and Hyderabad, which offer more space to choose from, lower operating costs and rapidly improving infrastructure.

"India's buoyant economy, steady progress in enacting regulatory reforms and booming outsourcing sector, coupled with a growing talent pool continues to make it an attractive outsourcing destination," CBRE (India and South East Asia) chairman Anshuman Magazine said.

"With corporates increasingly adopting cost effective workplace strategies, we believe that key cities in the country will remain on the radar of domestic and multinational corporates looking to expand their operations," he added.

The survey found that about 50 percent of multinationals will invest more in their workplace and space efficiency programmes, ranking it as their main priority for the coming year.