Besides, free trade agreements in many of these regions provide the necessary economic incentive as well. ‘’Regulatory requirements in areas like the EU do not allow personal information to be taken outside its borders, particularly in the financial services and healthcare industries. Besides, local professionals are more in tune with geography-specific legislative and corporate issues, giving them an edge,’’ he said. Add to that time-zone proximity and stern intellectual property laws in some areas, and the popularity of near-shoring becomes evident.

And as far as costs go, a near-shore alternative is at times more cost-effective than an offshore arrangement. ‘’A conscious effort is made to establish alternate delivery centres in territories where the advantage of cost arbitrage to be availed can be continued. For instance, Poland offers similar advantages of costs, technical academic institutions providing skilled manpower and immense support from the government. Hence, the value derived from near-shore may be beyond the cost of operations,’’ says Natarajan.

Companies like ICICI OneSource also see near-shoring as a natural step up the value chain. ‘’Having gained the confidence of clients by providing quality offshore services, it is important that we stake claim to the entire outsourcing pie and not restrict ourselves to the offshorable portion,’’ says an ICICI OneSource official. The company’s Belfast centre, which went live on August 15, will have 400 employees by year-end, while the centre in Londonderry, scheduled to start in a month, will employ 600 people by late 2007.

But can Indian companies compete with local service providers in these areas? Rahul Shah, head, solution design and implementation, knowledge services, Infosys BPO, feels they can. Says he: “Our services are more mature and quality-oriented, and cost less as well. The real competition comes from global majors like IBM and Accenture, which have a big presence globally.’’

... contd.