China's outsourcing industry growth is gradually reducing the gap with the leader India, according to a study released on Friday.

China is expected to account for 28.7 percent, or $35.76 billion, of the global outsourcing market in 2010, while India continues to lead with 43.7 percent share, China Daily reported, quoting a study released by XMG Global, a Canadian ICT research and advisory firm.

However, China’s outsourcing industry is estimated to post a revenue growth of 30 percent in 2010 against India’s 14 percent, the report said quoting Lauro Vives, chief analyst at XMG.

India's weakening lead is due to the substantial efforts of China, the Philippines, and other offshoring destinations in building their capacity to attract significant amount of investment, said Vives.

The Philippines, the third leading outsourcing destination globally, will see the growth rate increasing to 23 percent from 20 percent last year. Its share stood at 7.1 percent of the global outsourcing industry, the report said.

While India continues to remain the leader, the rest of the offshore countries are now beginning to mature,said Vives.

Overall, the global outsourcing is estimated to earn revenue of $425 billion, up 13.9 percent from a year earlier.

Despite a double-digit growth, this year's accomplishment is relatively low as compared to last year's 14.4 percent growth, indicative of slow investment expansions in offshoring destinations and conservative increase in outsourcing demand from the US and European region, Vives noted.

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