April 18, 2024: India has emerged as one of the leading offshoring destinations globally, according to the latest offshore leasing report from Knight Frank. According to the report, India’s offshoring leasing market grew by 26 percent in leasing volume in 2023, reaching 27.3 million square feet, compared to the previous year
In its comprehensive analysis titled “Asia Pacific Horizon: Harnessing the Potential of Offshoring,” Knight Frank sheds light on India’s remarkable growth in the offshoring sector. The report underscores India’s dominance, with over 46 percent of leased office space dedicated to offshoring activities in 2023, a significant increase from previous years.
Rapid Growth in Offshoring
The report highlights a staggering 26 percent growth in India’s offshoring market leasing volume in 2023, reaching a remarkable 27.3 million square feet. Global Capability Centres (GCCs) have emerged as the primary offshore occupiers, driving the surge in demand for office space.
Bright Outlook for GCCs Share in Leasing Transactions
Viral Desai, Senior Executive Director at Knight Frank India, anticipates a promising future for GCCs, projecting an estimated 2,400 centers across India by 2030. This growth trajectory positions India as a global technology and services hub, poised to shape the offshoring landscape in the coming decade.
Diversification Across Industries
While the Information Technology sector remains a dominant force, the report highlights growth within GCCs in the industrial sector. Notably, sectors such as semiconductor, automobile, and pharmaceutical industries have witnessed substantial expansion, securing large office spaces to capitalize on emerging opportunities.
Driving Factors Behind Offshoring Surge
Cost-effectiveness and strategic advantages continue to drive global companies towards offshoring solutions. India, alongside key APAC hubs like the Philippines, Malaysia, and Vietnam, has become pivotal in meeting the evolving needs of businesses seeking efficient and scalable offshore services.
Expanding Export Projections
Indian IT service exports are forecasted to soar from USD 185.5 billion in 2023 to USD 230.5 billion in 2025, highlighting the sector’s robust growth trajectory. With substantial commercial asset supply expected, the Indian office market is projected to surpass one billion square feet by 2025, signaling immense growth potential.
Appeal of Offshoring in the Region
The report delves into the factors that make the Asia Pacific region an attractive destination for offshore services. It provides invaluable insights into the evolving industry landscape, offering essential guidance for businesses and investors navigating the dynamic offshoring market landscape.
With agency inputs
