India is the most popular outsourcing destination in the world and is experiencing rapid growth, a new survey shows.

A study conducted by recruitment specialist Elixier Web Solutions noted that the number of outsourcing deals set up in India was increasing by 40 per cent a year – far faster than even its nearest rival China with 25 per cent growth.

However, it was suggested that many firms still consider outsourcing a "luxury" instead of boosting efficiency by allowing specific services, such as IT support, to be carried out by more specially-trained firms.

Elixier Web Solutions associate partner Jacob Samuel told the Economic Times: "Certain companies restrain from outsourcing their practices thinking it to be a luxury practice which only organisations having deep pockets can afford."

Explaining the success of Indian outsourcing, the chief executive of research firm Aranca, Hemendra Aran, said: "In terms of [having a] skilled and highly educated talent pool, scalability a mature industry that understands outsourcing, cost advantage, English language skills and so on, very few other destinations even come closer to India."