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With inflation heating up in developed countries, multinational countries may be looking to outsource manufacturing and services to cost-effective geographies, and India has a considerable advantage here.
Wage growth in India has been slower than it has been in China and in geographies that are competing for the China-plus-one opportunity.
She added, “This could be an opportunity for India to boost services exports.”
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But Majumdar said that the country may need to offer more than labour arbitrage to companies.
She said, “India is also witnessing a shift in the services sector’s value chain. With emerging technologies, India’s selling proposition would be away from the safe harbour of cost savings to competence and value creation.”
“India will need a focused strategy that goes beyond labour cost arbitrage to labour capability advantage backed by technology-driven processes,” she added.
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