Why Companies in the US and Canada Outsource Software Development to India

Software outsourcing has been part of the global tech industry for years. In the mid-1990s, many U.S. companies began working with engineering teams in India to access technical talent that was hard to find locally. As technology companies grew through the late 1990s and early 2000s, this model became more common.

But the reasons companies outsource today are very different from when they did back then. For many businesses in the US and Canada, outsourcing software development to India is no longer simply a cost-driven experiment but a strategic decision tied to access to experienced engineering talent and the ability to scale without disrupting core operations.

According to Grand View Research, India’s IT services outsourcing market crossed USD 21 billion in 2024 and is expected to continue growing over the next several years. That growth suggests companies are treating India as a long-term technology partner rather than a short-term outsourcing option.

This is also evident in how global companies operate, as India hosts global capability centres for several large multinational firms, with cities like Bengaluru and Hyderabad supporting permanent technology and product teams. These teams work on core software systems, platforms, and ongoing development.

According to a report by Nasscom and Zinnov, India’s GCC market is expected to grow from  $64.6 billion in FY 2024 to between $99 billion and $105 billion by 2030. For companies in the US and Canada, this reflects a clear shift toward building and scaling technology operations in India over the long term.

How India Became a Go-To Hub for Software Outsourcing

India’s outsourcing sector is increasingly being seen as a “bright spot” in the global tech landscape. Industry experts point out that global tech companies are not only outsourcing software development to India but are also expanding broader operations here. Michael Yoshikami, CEO of Destination Wealth Management, notes that this growing confidence reflects companies' view of India as a long-term partner. 

Adding to this, Krina Mehta, co-founder of the US-based offshore software development firm Fortune Infosys, notes that many businesses choose India for software projects because it delivers high-quality work at reasonable costs. Together, these factors have helped position India as a go-to destination for software outsourcing. Together, these factors have helped position India as a go-to destination for software outsourcing. Let’s explore the top five reasons why this choice makes sense.

Access to Top Tech Talent

India has one of the largest pools of software developers in the world. As of today, 1.9 million developers in the country are active on GitHub, making India the second-largest developer community worldwide, after the United States. GitHub’s Octoverse 2025 report projects this number will cross 57.5 million by 2030, the highest globally.

This depth shows up in day-to-day for easier scalability of  hiring. Which means things aren’t boxed into narrow roles. The same market produces specialists in AI and machine learning, while also supporting developers working in Python, Java, .NET, and other mainstream stacks. At the same time, web, mobile, cloud, and data skills coexist in the same ecosystem. Because of that, teams can grow or change direction without having to rebuild everything from scratch. And this link between the size of the talent pool, the range of skills, and how work actually gets done is what makes India reliable for long-term technology partnerships.

Time Zone Edge for Global Teams

Time zones don’t always headline strategy discussions, but they quietly influence how global work actually gets done. India’s GMT+5:30 time zone naturally overlaps with Europe, the Middle East, and much of Asia, while still aligning with early morning or late evening hours in North America. And it’s one of the reasons global teams increasingly lean on India for development work.

Plus, when teams in different parts of the world can work at the same time, collaboration becomes real-time instead of batch‑processed. It means work can keep moving even after the local team clocks out. For instance, a U.S. company can have its team in India work while it’s nighttime in the U.S., so progress continues around the clock. Moreover, if we look at  India’s workforce, it offers cultural adaptability and strong English proficiency to the table, meaning conversations don’t stall over language barriers or misunderstandings. According to the RBI, India’s software services exports reached US$190.7 billion in 2023–24, with the United States alone accounting for 54% of these exports. It’s a clear sign of how closely Indian teams are already working with American businesses, making round-the-clock progress possible and practical solution.

As we can say,  follow-the-sun approach to development is not merely about cutting costs but about gaining a competitive edge as a global player.

Scalability, Flexibility & Innovation Benefits

India’s software ecosystem is not only defined by scale alone rather with what draws global companies attention is ability to build, adapt, and evolve alongside modern technology shifts. In reality a product that’s quietly finding its footing today can suddenly need to support thousands of users, new features, or an entirely new market tomorrow. When that happens, the real test is whether the technology and teams behind it can scale without breaking momentum. This is where India’s strength becomes clear globally.  Companies don’t just outsource for execution; instead, they build long-term technology partnerships here because teams can scale up or down quickly, adapt to new frameworks, and support everything from core platforms to AI- and cloud-driven systems, all without slowing delivery.

Conclusion 

Outsourcing software development to India goes beyond cost savings; it gives businesses access to skilled development teams that can scale, adapt, and deliver complex projects efficiently. That's the reason companies in the US and Canada are increasingly outsourcing software development to India, because it combines skilled development teams. In practical terms, this ecosystem helps technology deliver what businesses care about most: faster delivery, lower costs, and better ROI. Within this landscape, Tech Essentia's development team quietly drives global projects, providing the expertise companies need to grow and stay ahead in a fast-moving market.