Offshoring

When sourcing globally, it is likely that at least some of the successful suppliers will be located in a country other than the buyer’s country. Offshoring is used most specifically in the context of outsourcing business processes or services, often to low cost countries. Successive rounds of trade liberalisation have promoted international free trade by reducing tariff barriers, and free trade agreements between nation states have also encouraged global sourcing, as opposed to nationalistic ‘buy national’ strategies. The emergence of strong service sectors in some low cost countries, especially India, has led to key business processes being ‘offshored’. From the perspective of the buying company, the service provider is offshore. See also Low Cost Country Sourcing and Outsourcing.