India is being challenged on maintaining her leadership in outsourcing. But something interesting is cooking behind the curtain that will make India even stronger in BPO. Though business-process outsourcing contributes substantially to India's revenue and drives 30 per cent of growth in its IT exports, sustaining it would be a challenge as other English-speaking countries are starting to erode the country's cost advantage, according to Forbes magazine. Elaborating on the issue, Forbes.com Editor Paul Maidment says other English-speaking countries are starting to erode India's cost advantage and the Philippines is becoming a serious competitor. China is another growing rival and has the advantage of "more comprehensive and reliable" infrastructure than India. Besides, the disapora of overseas Chinese is bigger than that of non-resident Indians, particularly in the US and Southeast Asia.

Yet another rival is Vietnam, which is emerging a lower-cost rival to the Indian firms and further down the cost ladder are French-speaking Seychelles or Mauritius who have the language advantage in European markets, he says. He notes that India's three leading IT companies--the giant Tata group's consulting arm TCS, Infosys and Wipro--get about 80 per cent of their revenue from overseas sales--and 80 per cent of that is accounted for by the US. But a weakening dollar and the political scrutiny in the US, where nine states are considering an anti-outsourcing legislation, have put pressure on India's IT sector to diversify its export markets. Indian IT companies, Paul says, are making substantial inroads in the UK, which is responsible for two-thirds of their European earnings. Labour union opposition to outsourcing there is diminishing. But behind the scene the expatriate Non Resident Indians are ready to take over the leadership. India will become even stronger in outsourcing through the direct participation of the expatriates.