A former British colony, Indian retains a strong cultural affinity with Western nations. U.S. and European customers cite cross-cultural differences as a big barrier to success when outsourcing to China, according to Gartner. Chinese workers can have difficulty adapting to collaborative or entrepreneurial environments.
China has made major investments in a sleek and modern transportation system, power supply, telecommunications, and high-speed broadband. India's infrastructure is weak and has not kept pace with economic growth.
India's government was slower to join its own ITO party but has created a business-favorable legal and regulatory environment. China's central government has gone into overdrive with a fiscal policy that encourages IT services development.
A strong India rupee stills erodes the margins of Indian providers (or gets passed on in higher customer costs). China's currency is also strong, but does not float despite increasing pressure from trading partners to appreciate the yuans value.
For Western customers, India's legal system is familiar-a British-based common law system with an independent judiciary. China's civil law system derived from Soviet and continental legal principles; critics warn that it is opaque, complex, and inconsistently enforced.
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