Impact On India's Economic Rise Of International Service Outsourcing

With the propelling of information technology revolution and servicesglobalization，more and more enterprises separate intermediary services business fromproduction process through outsourcing in the global scope，which gives a birth to theinternational service outsourcing. International service outsourcing has become a newglobal revolution and transferred model of industry and develops quickly after theglobal manufacturing relocating since the20th century. Therefore, internationalservices outsourcing will have profound impact on the economic development of acountry.By reading the relevant literature，based on the lessons of previous research. Thispaper make the introduction of the theoretical analysis of the characteristics ofinternational service outsourcing phenomenon and the economic effect ofinternational service outsourcing first. Then, it gives a analysis of these aspects ofinternational service outsourcing characteristics, including its meaning, theclassification and motivation. Last, on the base of the deep analysis of the globalservice and Indian service outsourcing industry development, the paper providesspecific impact on the Indian economy and builds a theoretical frame work of Indianeconomic effects of international service outsourcing.In order to validate the theoretical analysis，based on the reality of servicesoutsourcing and services outsourcing industry development in India, the paperanalyses the economic effects of international services outsourcing empirically. Andwe take the advantage of three variables-----gross domestic product (GDP), the valueof the various industries and total employment to conduct Stationary Test, ADF UnitRoot Test and Granger Causality Test. The results show that international serviceoutsourcing has expanding effect to economic development, industry upgrade andemployment amount in India. At the same time, in India international serviceoutsourcing is earlier than China, and successfully. Thus the rapid development ofservice outsourcing industry in India has great significance to China. In addition, the experience of developing the education to form a human resources advantage andsupporting the development of enterprises to form enterprise scale and capacityadvantages in India, which is worth considering for China.International service outsourcing has become an important industry, which willaffect the development of the world economy. While India is China’s neighbors and itis also one of the best countries in the development of service outsourcing indeveloping countries. The purpose of study this problem is that through research theimpact of the development of service outsourcing on India’s economic growth, so thatwe can promote economic development and solve the problem of employment forChina. Thus, it not only has high theoretical value, but also has important practicalsignificance.