India remains the world’s top destination for offshore development teams, and for good reason: a deep pool of English-speaking engineers, 5-7x cost savings compared to the US, established tech ecosystems in multiple cities, and a time zone that enables a “follow the sun” development cycle. But setting up an offshore team is more complex than posting jobs on Naukri and hoping for the best. Here is a practical, step-by-step guide.
Step 1: Choose Your Engagement Model
Before you hire a single person, decide how you want to structure the offshore team. There are four common models, each with distinct trade-offs:
Model A: Build Your Own Entity
Set up a wholly owned subsidiary or LLP in India, hire employees directly, and manage the team yourself.
Pros: Full control, complete IP ownership, direct employer-employee relationship, long-term cost efficiency Cons: 3-6 months to set up, requires local legal/accounting/HR, regulatory compliance burden Best for: Companies planning to build a team of 20+ with a long-term (3+ year) commitment
Model B: Employer of Record (EOR)
Use an EOR service that legally employs the team on your behalf while you manage them day-to-day.
Pros: Launch in 2-4 weeks, no entity setup, compliance handled by EOR, easy to scale Cons: Per-employee fees reduce cost savings, less control over HR policies, employee loyalty may split Best for: Companies testing the waters with 5-15 people before committing to a full entity
Model C: Staff Augmentation
Engage a staffing partner who provides pre-vetted professionals on your team, managed by you, but employed by the partner.
Pros: Fastest to deploy (1-2 weeks), zero HR/compliance overhead, flexible scaling, easy to exit Cons: Higher per-person cost, vendor dependency, augmented staff may feel like second-class citizens Best for: Companies with immediate needs, uncertain long-term plans, or fluctuating team size
Our staff augmentation service is designed specifically for this model, deploying pre-vetted engineers who integrate seamlessly with offshore teams in 5-10 business days.
Model D: Build-Operate-Transfer (BOT)
A partner builds and operates the team for 12-18 months, then transfers the entire team (and optionally the entity) to your ownership.
Pros: Fastest path to a self-owned team, vendor handles the hard part (setup, hiring, compliance), lower risk Cons: Higher initial cost, transfer can be complex, dependency on partner during operate phase Best for: Companies that want a captive centre but do not want to manage the setup themselves
Step 2: Choose Your Location
India’s tech talent is concentrated in specific cities, each with distinct characteristics:
Bengaluru (Bangalore):
- Largest tech talent pool in India (2M+ IT professionals)
- Highest salary costs (15-25% premium over other cities)
- Every major tech company has a presence here
- Best for: Companies that need top-tier talent and can afford the premium
Hyderabad:
- Second largest tech hub, rapidly growing
- 10-15% lower salaries than Bengaluru
- Strong enterprise tech (Microsoft, Google, Amazon all have major offices)
- Best for: Enterprise technology and cloud engineering teams
Pune:
- Strong engineering talent from multiple top universities
- 15-20% lower salaries than Bengaluru
- Good quality of life (lower cost of living, less traffic)
- Best for: Mid-sized teams that want quality without Bengaluru costs
Chennai:
- Deep enterprise and product engineering talent
- Strong in automotive, healthcare, and financial services technology
- 15-20% lower salaries than Bengaluru
- Best for: Domain-specific technology teams
Emerging hubs (Jaipur, Kochi, Indore, Coimbatore, Bhubaneswar):
- 30-40% lower salaries than Bengaluru
- Smaller but growing talent pools
- Lower attrition rates (fewer competing companies)
- Best for: Cost-optimised teams, remote-first setups, and Tier 2 city specialists
Step 3: Hire the Right People
Offshore team hiring requires additional evaluation criteria beyond technical skills:
1. Communication skills are non-negotiable Every candidate must demonstrate clear verbal and written communication in English. This means structured explanations, active listening, and the confidence to ask questions and push back when needed. A brilliant engineer who cannot articulate their thinking in a cross-cultural setting is a liability, not an asset.
2. Overlap-friendly work patterns Depending on your home country’s time zone, your offshore team will need to accommodate 2-4 hours of overlapping work time. Hire people who are comfortable with early morning or late evening calls.
3. Self-management and proactive communication Offshore teams operate with less casual oversight than co-located teams. Hire engineers who proactively flag blockers, document their work, and communicate progress without being asked. The remote hiring playbook covers how to screen for these competencies in interviews.
4. Cultural adaptability Indian engineering culture tends toward deference to authority and reluctance to say “no” or push back on unrealistic timelines. Explicitly evaluate and hire for directness and honest estimation.
Step 4: Build the Communication Framework
Communication is where offshore teams succeed or fail. Here is a proven framework:
Daily:
- 30-minute standup with the onshore team during overlap hours
- Async updates in Slack/Teams for non-blocking items
- End-of-day summary from each offshore team member
Weekly:
- 60-minute sprint planning/review with both teams
- 30-minute 1:1 between offshore engineers and their onshore counterparts
- Architecture or design discussion for upcoming work
Monthly:
- Retrospective covering both team dynamics and process improvements
- Knowledge-sharing session (tech talk or demo from either team)
- 1:1 between offshore team lead and onshore engineering manager
Quarterly:
- In-person visit (onshore team visits India or vice versa)
- Team-building activities (even virtual ones)
- Strategy alignment and roadmap review
Step 5: Integrate, Don’t Isolate
The biggest mistake companies make with offshore teams is treating them as a separate, subordinate entity. This creates:
- “Throw it over the wall” dynamics where the onshore team designs and the offshore team implements
- Information asymmetry where the offshore team lacks context about business goals and customer needs
- Cultural division where the offshore team feels like second-class citizens
What to do instead:
- Share context generously: Include offshore team members in product meetings, customer demos, and company all-hands
- Assign ownership, not tasks: Give offshore engineers ownership of features or modules, not just ticket assignments
- Rotate responsibilities: Have offshore and onshore engineers pair on code reviews, incident response, and design work
- Invest in relationships: Fund 1-2 in-person visits per year. The ROI of face-to-face relationship building is enormous for offshore teams.
Common Pitfalls and How to Avoid Them
1. Starting too big. Begin with 3-5 engineers, prove the model works, then scale. Companies that hire 20 people on Day 1 usually regret it.
2. Skipping the team lead. Your first offshore hire should be a senior engineer or tech lead who can manage the local team, bridge cultural gaps, and maintain quality standards. Do not try to manage 5 junior offshore engineers directly from another country.
3. Neglecting documentation. Offshore teams live and die by documentation quality. If your codebase has no READMEs, your architecture is undocumented, and your processes live in people’s heads, fix that before you hire offshore.
4. Different tools and processes. The offshore and onshore teams must use the same tools, the same branching strategy, the same CI/CD pipeline, and the same coding standards. Any divergence creates friction and quality issues.
5. Ignoring holidays and cultural events. India has numerous national and regional holidays. Build a shared calendar that respects both teams’ holidays and plan project timelines accordingly.
The Bottom Line
Building an offshore development team in India is one of the highest-leverage decisions a growing technology company can make. But it requires deliberate planning, thoughtful execution, and genuine investment in integration. The companies that treat their offshore team as a true extension of their engineering organization — not as a cost centre to be minimised — are the ones that get exceptional results.
Related Reading
- Remote Hiring in India: Building Distributed Tech Teams — Sourcing, hiring, and managing remote teams across India’s cities
- GCC Setup in India: A Staffing Perspective — How Global Capability Centers are structuring their India operations
- Staff Augmentation Services — The fastest path to deploying pre-vetted offshore engineers
