China has got some way to go before it catches up with India in the outsourcing arena, says a study by Tholon, according to a white paper prepared by the services globalisation advisory and investment firm.
So what does India have that China doesn’t? Good English speakers for one. Also, better communication skills, more maturity in service delivery, better cultural compatibility and more confidence from buyers in the US and Europe. India has her problems ofcourse like shortage of talent, rapidly rising wages and real estate prices…but inspite of this India is believed to hold an edge over China. 
Tholon has painted a very rosy picture…but is it realistic? The infrastructure in the two most famous outsourcing cities – Bangalore and Pune – is bursting at the seams. Traffic congestion, unrealistic real estate prices, shortage of water, and a few months ago Pune was reeling under powercuts. Ofcourse Tholon does caution:  

India will lead in the IT/BPO space, but it faces challenges such as overheating of the offshore outsourcing market due to attrition, escalating wages, talent scarcity and rising real estate prices, which are leading entrepreneurs to explore other options including China, the Philippines, Russia and other tier II cities of India.

Other tier II Indian cities are fine but what if we lose business to other countries? Its best that India takes this report by Tholon as a warning to improve infrastructure and not as a pat on the back. Complacency is the worst thing that can happen.
Take Bangalore. There are a lot of plans to improve infrastructure but at present the situation is so bad that when foreigners come here they are shocked by the traffic jams and the condition of the roads. It is no better in Pune.  The city does not even have a proper mass transport system. 
The good part is that roads are being widened and concretised, and flyovers are being built…but the congestion seems to keep increasing inspite of this. It makes one feel that whatever is being done is not enough.   

(Picture of traffic jam sourced from The Week)