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India emerges as offshoring hub with growth in office leasing: report

India has emerged as one of the leading offshoring destinations globally, according to the latest report from Knight Frank.

The report, titled “Asia Pacific Horizon: Harnessing the Potential of Offshoring,” highlights the significant growth of the offshoring market in India. In 2023, it accounted for over 46 percent of leased office space, with Global Capability Centres (GCCs) emerging as the primary offshore occupiers.

According to the report, India’s offshoring market grew by 26 percent in leasing volume in 2023, reaching 27.3 million square feet, compared to the previous year.

“The growing share of Global Capability Centres (GCC) in total leases will remain supportive of office market demand in 2024. Further, it is projected that GCCs will potentially drive the office market in the next decade. By 2030, there will be an estimated 2,400 GCCs across India as it emerges as a global technology and services hub[1]” said Viral Desai, Senior Executive Director, Knight Frank India.

The report further highlights that the GCC landscape in India has experienced growth with over 1,580 centers across the country in 2023. The share of GCCs in leasing transactions in India has surged from 25% in 2022 to 35% in 2023.

While the Information Technology sector remains the dominant occupier among GCCs in India, growth has been observed within GCCs in the industrial sector, particularly in the semiconductor, automobile, and pharmaceutical industries. These GCCs have secured large office spaces to capitalize on unique growth opportunities and align with global industry trends.

The report underscores the increasing preference among global companies for cost-effective solutions, leading to a surge in offshoring functions as a strategic avenue. Offshoring has emerged as a critical driver propelling office demand in key APAC hubs, including India, Philippines, Malaysia, and Vietnam.

Furthermore, Indian IT service exports are projected to expand from USD 185.5 billion in 2023 to USD 230.5 billion in 2025. With the current pace of additional commercial asset supply, the Indian office market is estimated to reach an impressive one billion square feet by 2025, indicating robust growth prospects for the sector.

The report also highlights the essential factors defining the region’s appeal as a prime location for offshore services. It sheds light on significant changes in the industry landscape, providing valuable insights for businesses and investors navigating the offshoring market.

(With ANI input)

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