India, an emerging economic superpower, continues to attract investors across the globe. Relatively unscathed even in the midst of a deep economic recession in 2007, India remains the second fastest-growing economy in the world. Its average annual growth rate was 7.3% over the last decade.

Causing concerns for policy makers, however, is the rise in inflation – soaring to 13.2% in 2010, an all-time high in this decade.

3 essential factors in India’s competitive edge

• India maintained a steady gross domestic product growth rate of more than 5% over the last 10 years, except for 2001 (4%). The economy gained momentum in 2010 after the global crisis to post a strong figure (9.9%). Economists predict a transformation whereby India and China surpass the United States by 2050.
• With a population of 1.2 billion, India has a huge middle-class consumer base.
• In a world challenged by a looming talent scarcity, India acts as a virtual factory and expertise centre for global entrepreneurs. Its large skill base provides a variety of choices for those seeking talent. But the lack of quality educational facilities (vocational) limits workforce employability.

The top employment centres and their specialties

Growth rates in the leading employment centres differ according to population shifts and the popularity each city holds for work outsourced from foreign multinationals. Major industries tend to cluster in these centres:

• Bangalore: information technology (IT) and IT-enabled services, textile design, manufacturing, bio-technology
• Chennai (formerly Madras): financial services, automobiles, IT and IT-enabled services
• Hyderabad: IT and IT-enabled services, pharmaceuticals, handicrafts
• Kolkata (formerly Calcutta): engineering, automobiles, pharmaceuticals, chemicals, agriculture
• Mumbai (formerly Bombay): asset management, banking, financial services, pharmaceuticals, engineering, petrochemicals, IT-enabled services
• New Delhi: Telecommunications, hotels, media, banking, tourism, retail, IT and IT-enabled services, construction, power

When establishing operations or outsourcing work in India, employers need access to pay data so they can effectively budget their human capital resources. But companies employing this large workforce soon discover that salary levels vary significantly across the Indian market. To attract and retain qualified workers and optimise their skills in the right locale, employers should also consider factors, such as:

• The going rate for IT professionals in, say, Hyderabad, compared with Chennai
• Significant differences in the cost-of-living between, say, Bangalore and Kolkata