Lab tests - the next outsourcing target for India

India is again on the verge of a new outsourcing wave, this time not so much involving a lot of displaced and disgruntled workers in America.

A lot of hospitals in the US and UK are reportedly outsourcing laboratory and diagnostic tests in India where it costs about 70 to 80 percent less to conduct.

At the moment, this is generally limited to highly-specialized tests such as those related to cancer, HIV, tumour and hepatitis. So why the big fuss over this development?

It's because India has more than 20,000 laboratories that can conduct more than 1,500 kinds of tests. More than enough to serve the requirements of hospitals in North America and Europe.

With that range on offer, it's no surprise that the big Indian lab companies are either in talks with or already are partnering with hospital chains overseas for more long-term outsourcng contracts.

Indian lab companies have reportedly already scored contracts with a lot of hospitals from the Middle East.

A possible downside, however, is that only a few of them have any international accreditation that instills confidence about their quality among foreign hospital chains.

Indian laboratory companies recognize that local US and European labs could kick up a rumpus about outsourcing work to India and argue that the quality of work here is below standards.

But Indian labs may have an ace or two up their sleeves. For example, they could underline the quality control standards here.

To import blood samples for testing purposes, laboratory testing companies have to acquire a licence from the Drug Controller General of India, in addition to approval from the Director General of Foreign Trade. Lab companies have already approached them for approvals.

Still, Indian lab companies believe that a huge backlash against outsourcing lab work in the West is unlikely since this is a highly complex and expertise-driven jobs unlike call centers or BPO.