Sourcing from low-cost countries to rise by 85%

European and US companies plan to increase the sourcing of goods and services from low-cost countries, including India, by 85 percent within the next 2-3 years, according to a study by global consultant Accenture.

The study, based on a survey of 238 US and European companies, has found that out of 50 percent of companies that do not currently source goods and services from low-cost countries including China, Latin America and Eastern Europe, would start doing it within the next 2-3 years, Jose Morales, partner, Accenture said.

The global auto component exports can touch about $700 billion by 2015 of which India's share would be about 2.5 to 3 percent or about $25-30 billion as against the present $ 1.8 billion.

India's share in sourcing by US and European companies was about 14 percent while that of China was 23 percent.

The sectors having potential for sourcing from India include automotive, apparel, electrical and electronics, pharmaceuticals, chemicals, leather products, machinery, iron and steel, non-ferrous metal and rubber.

Morales said Indian suppliers have established quality performance, skill intensive segment including design capability, availability of qualified personnel, commitment to contractual agreement, adoption of robust account practices and cost effectiveness than China for small and medium volumes.