Offshoring to India: 2025 Guide for U.S. Businesses

Thinking about offshoring to India from the US? If you're struggling to scale your team, dealing with increasing costs, or hoping to connect with some of the best talent around the world, you've come to the right spot. 

In this article, we’ll walk you through why India is a leading offshoring destination, the benefits it offers, common challenges to watch for, and the steps to successfully build and manage your offshore team.

What are the key reasons to offshore your business to India?[toc=Key Reasons]

India remains a trusted offshoring destination for a long time, but in 2025, it’s not entirely about strategic necessity for saving money alone. It’s more about building high-performing teams with the speed, scale, and skill that businesses need.  Here’s why companies are counting on India now more than ever:

Access to skilled talent at scale

Every year, India churns out more than a million engineering graduates, many of whom are fluent in English and well versed in global technologies. At Wisemonk, we’ve dealt with U.S companies that encountered a similar situation, failing to find specialized positions locally but filling them within weeks in India by hiring skilled Indian employees. The talent pool here is not only rich but also very responsive to international work cultures.

Cost efficiency without compromising quality

While offshoring to India does offer cost savings, it’s not about being cheap. It’s about finding value. Businesses can save up to 60% of their labor cost in the US, and will not have to worry about losing quality. We’ve seen companies hold the line and extend their operational runway dramatically.

Time zone advantage for round-the-clock productivity

One of the biggest perks? Time zones! As the U.S. teams wrap up their day, the Indian teams can take over work while the U.S. sleeps. It creates a 24-hour workflow that speeds up development cycles, manages operations, and customer support without burning anyone out.

Strong tech and startup ecosystem

India is no longer just a back office. Cities like Bangalore, Hyderabad, New Delhi and Pune are packed with cutting-edge startups and global R&D centers. Companies like Meta, Google, and Amazon all have enormous tech hubs in India, not just for customer support and desk services, but to innovate.

How to successfully offshore to India?[toc=How to Offshore to India] 

Based on our extensive experience in helping U.S. businesses successfully offshore to India, we’ve found that following a clear, structured process makes all the difference. If you’re planning to start, here’s how to approach it the right way:

Step 1: Identify what to offshore and why

Begin by understanding which functions are practical to offshore. It might be product development, customer support, quality assurance, or even sections of your marketing team. Try answering the question, “ Is this a core business activity, or can we distribute this remotely without losing control?”

Step 2: Choose the right offshore partner or model

You have multiple options, like partnering with freelancers, agencies, Employer of Record (EOR), or building your own GCCs. We have seen several mid-sized U.S. companies succeed with the EOR model because of its fast and compliant solutions. Others choose agencies for short-term projects or specialized skills.

Step 3: Establish clear processes and governance

Documentation is your friend. Having SOPs, SLAs, and clear-cut KPIs helps in avoiding any sort of confusion and aids in keeping all the participants accountable. Without all these proper documentations, things may quickly go wrong.

Step 4: Build a unified and collaborative culture

Treat your offshore team as valued colleagues rather than outsiders. Involve them in meetings, celebrate achievements together, and visit them in person when possible. Utilize tools like Slack, Notion, and Zoom to foster open communication and enhance team collaboration.

Want to go deeper into how to build and manage an offshore team in India? Check out this guide to build your offshore team in India.

What are the top U.S. industries choosing India for offshoring?[toc=Top Industries Offshoring to India]

You might be wondering if only tech teams are offshoring to India. Not at all. Here are some of the top industries that are offshoring to India:

Information Technology and Software Development

Be it enterprise software or a SaaS product, India is a powerhouse for software development. Many mid-sized firms build their entire engineering teams here.

Customer Support and Call Centers

India continues to be a top spot for multilingual, around-the-clock support. Companies like Amazon have enormous technical support operations in Indian cities that manage everything from logistics to customer questions.

Finance, HR, and Business Process Outsourcing (BPO) services

Be it accounting, compliance, payroll, BPO companies or HR operations, U.S. companies are increasingly outsourcing these to India to control costs and enhance efficiency.

R&D and Innovation Labs

It’s not just execution anymore. From artificial intelligence and machine learning to cybersecurity, there are some cutting-edge innovation labs set up by global companies in India.

What are the key challenges of offshoring to India?[toc=Key Challenges]

India offers several benefits, primarily driven by the desire to reduce overhead costs. However, companies are increasingly recognizing potential downsides. Here are some of the challenges to keep in mind while considering offshoring :

Legal, Regulatory, and Data Security Concerns

Indian labor laws can vary between different states in the country, and data protection rules are constantly evolving. Also, the international compliance requirements, and things get complicated fast. If your offshore partner doesn’t have a solid grip on local legal frameworks, you’re setting yourself up for risk. That’s why it’s worth working with a trusted EOR partner who can walk you through it all.

Communication Barriers

Yes, most Indian professionals speak excellent English, but that doesn’t always guarantee smooth communication. Sometimes it’s the little things like how feedback is given, how urgency is interpreted, or whether something that sounds like a yes actually means yes. Clear documentation, weekly standups, and creating space for clarification can solve most of these issues.

Cultural Differences

In Indian work culture, hierarchy often plays a bigger role, feedback tends to be more indirect, and holiday schedules may not always align. These differences aren’t obstacles, but they simply call for awareness and mutual respect. When teams take the time to understand each other’s work culture, collaboration flows much more smoothly.

Project Management and Control

Managing a remote team across time zones takes intentional effort. Without strong leadership and clear goals, it’s easy for projects to go off track. That’s why we always recommend assigning a dedicated offshore lead for overseas operations and using reliable tools like Jira or ClickUp to stay aligned.

Hidden Costs and Quality Control

Sometimes it’s not the hourly rate that catches you off guard, it’s the hidden extras or overhead costs. Onboarding, extra QA rounds, miscommunications, and time zone gaps can all creep in if you’re not ready for it. That’s why it’s important to set clear expectations upfront, define what quality looks like, and leave room for feedback and adjustments. Choosing the right EOR partner can also save you from spending more on fixes down the line.

Why Wisemonk is your ideal partner for offshoring to India?[toc=Why Choose Wisemonk]

Wisemonk is an India-focused Employer of Record (EOR) service designed to help global companies hire, pay, and manage employees in India without setting up a local entity. With a deep understanding of the Indian market, we handle the complexities so you can focus on growth. Our team is dedicated to delivering a seamless experience from day one. Here's  how we help you offshore to India:

• End-to-End Compliance Management: We take care of all local employment contracts, payroll, tax withholdings, and statutory benefits, ensuring your business stays fully compliant with Indian regulations.
• Quick Onboarding: Wisemonk enables you to hire and onboard employees in India within just 2-4 days, drastically reducing your time-to-market.
• Comprehensive Payroll & Benefits Administration: We manage accurate payroll in INR, Provident Fund, health insurance, and other statutory benefits, all tailored to Indian expectations.
• Equipment Procurement & Management: From sourcing to delivery and secure device management, we handle all hardware and software needs for your Indian team.

Beyond these, Wisemonk provides a range of services to further support your India operations. These include contractor management, background checks, office setup assistance, and ongoing HR support. Our integrated services also offers employee self-service portals and performance management tools, ensuring your team remains productive and engaged.

Curious if offshoring is the right move for your business?

Let’s talk. We offer a free consultation to understand your goals and recommend the right approach.

Reach out to us today!

FAQs[toc=FAQs]

1. Why is tech outsourced to India?

Tech is often outsourced to India because the country has a massive pool of skilled engineers who deliver great work at a lower compensation and they speak fluent English, which makes collaboration easier.

2. Why is India an ideal offshoring destination?

India is considered one of the best offshore locations because it combines skilled professionals, 24/7 productivity, affordable operations, and a strong tech ecosystem, all of which make offshoring smoother, faster, and more effective.

3. Why are American companies outsourcing to India?

Most of the American companies are outsourcing to India to save money, speed up timelines, and tap into a deep bench of experienced professionals.

4. What’s the best way to set up a long-term offshore tech team in India?

To develop a long-term tech team in India, the Offshore Development Center (ODC) model is one of the most efficient ways. It gives you a dedicated team, full control, and cost savings, all without the hassle of setting up your own entity.  Here's a guide on how ODCs work and why they’re a smart move.

5. How to get outsourcing work from the USA to India?

You can start outsourcing work from the USA to India by showing your capabilities and creating a strong portfolio, highlighting client success stories, and maintaining open, honest communication. Delivering high-quality work consistently builds trust and opens the door to referrals and repeat business.

6. What US jobs are outsourced to India?

Nowadays, most of the jobs, from software engineering and customer support to accounting, HR, and design, everything is outsourced to India.

7. What types of companies benefit most from offshoring to India?

Startups, fast-growing tech companies, and mid-sized businesses that need to scale quickly without breaking the bank see the biggest gains. But really, any company looking for quality talent and round-the-clock productivity can benefit.

8. Is offshoring only for tech roles?

Not at all. While software development leads the way, many U.S. companies offshore customer support, finance, HR, content, and even design roles to India.

9. How long does it take to set up an offshore team in India?

With the right partner to guide you through the process, you can go from idea to a fully functional team in 2–4 weeks. A lot depends on the role, the hiring process, and how quickly decisions are made.

10. How does offshoring to India compare to outsourcing elsewhere?

India offers a unique combination of technical depth, English fluency, cost efficiency, and cultural adaptability. While other countries may offer lower costs, few can match India’s scale and consistency for long-term success.

11. Is offshoring to India legal?

Yes, offshoring to India is legal and is a widely practiced business strategy among foreign companies.