Indian IT: The outsourcing story remains intact - Chart Of The Day 22 September 2015 - Equitymaster
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Indian IT: The outsourcing story remains intact
Sep 22, 2015


India is an information technology powerhouse. This is very well known. The talent and cost advantage that the country provides gives it a very strong edge over its peers; something which the sector has extracted very well over time. We came across an interesting chart that helps put things in perspective. Today's chart of the day gives an indication of the difference in salaries of the average mid level IT professionals across the world. The article was published on Wall Street Journal's website. The survey was carried out by myhiringclub.com.

As you can see, the chart very much puts in perspective the cost advantage that India has when compared to its global and emerging market peers. And this is despite the rising incomes in India. In fact, India is believed to have swapped places with China this year, making it one of the lowest paying nations for mid-career IT professionals. Average annual salaries for mid level professional in India stood at the range of US$ 41,200 in 2015 as compared to that of about US$ 42,700 in China and US$ 132,900 in the US.

It must be noted that the figures do not take into consideration the purchasing power parity. So while the cost arbitrage remains intact, Indian IT firms cannot rest easy. That's because their clients are no longer only interested in cost savings. In an extremely challenging global economy, western corporations want Indian IT firms to deliver a more compelling value proposition in terms of growth prospects. Not all of the Indian IT firms will be up to the task we believe.

Data Source: myhiringclub.com, WSJ

This Chart Of The Day was published in The 5 Minute WrapUp - Does Alibaba Meet The 'Buffett-Would-Buy' Criteria?

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