European companies 'increasing outsourcing spending'

Outsourcing is becoming increasingly popular with companies based in Europe, it has been suggested.

According to Indian newspaper the Hindu, a growing number of firms - including those located in the UK - are opting to use Indian firms to handle a variety of business functions.

This may include sales outsourcing and the news source noted that reducing costs is one of the main reasons why firms are opting to outsource parts of their operations to specialist companies overseas.

Partner at advisory firm Tholon Mr S Sabyasachi noted that there has been "an upsurge in demand" recently, with the focus being largely on "growth-related spending".

He noted that many customers seem to be more willing to spend their budgets on outsourcing after reducing their investment over the past 18 months, but noted that a "clearer picture" on the growth of outsourcing will emerge towards the end of the fourth quarter.

This opinion was shared by chief executive of Infosys Mr S Gopalakrishnan, who remarked he was "pleasantly surprised" by the signs of growth in the market.

India's National Association of Software and Services Companies recently predicted that the outsourcing marketing in India will see rapid growth over the next decade.