Offshore Team

How To Calculate The Projected Cost Of Offshore Software Development?

Although India is among the top digital nations that assure a significantly lower cost of offshore software development, the final cost of the project can broadly vary on several factors.

As per the new Wall Street Journal report, there were close to 918k unfilled jobs in the IT sector in the USA alone in 2019, with at least a 30% increase in the current time frame. On the other hand, a survey by Manpower Group also suggests that more than 45% of companies find it hard to get skilled professionals on board.

Contradictory, isn’t it? However, you can get the right team at the right price for your next big software development project if you follow a specific SOP to create a win-win situation for both parties.

How To Calculate The Estimated Cost Of Offshore Software Development Project?

The new global outsourcing survey by Deloitte recently claimed that more than 70% of organizations prefer to outsource their projects for better cost optimization and faster TAT. However, the cost of offshore software development can increase if you don’t know about the tested ways to find the right offshore team for your next project.

However, there are six key aspects that you should consider for getting the lowest from remote offshore developers.

  1. Define a transparent but objective scope of the project before entering the development phase.
  2. You should have a clear idea about the project’s short-term and long-term goals, along with all its deliverables from the developer’s end.
  3. You should only hire the right offshore development team having sufficient expertise and experience in the specific technology.
  4. Never confuse the estimated project cost with the final project cost, as it can vary depending on several factors.
  5. Consider an estimated overhead cost on your budget as you may encounter unexpected bugs during development that needs additional work hours.
  6. You may need to consider additional costs in your overall budget, as the projected cost can increase if you need changes during the development phase.

There is no doubt that outsourcing your software development project to remote developers in India is one of the most cost-effective solutions that assures at least 70% lesser project cost than hiring an in-house development team, especially in the USA and UK.

6+ Key Factors Affecting Offshore Software Development Costs

Although several factors can influence the expected cost of offshore software development projects, the real-world cost largely depends on six crucial factors that are as follows.

1. Size And Length Of The Project

The volume of work and the overall time needed to develop a project are directly proportional to the projected cost. Although you can hire the best developers in India for low costs compared to Tier-I countries, you must have realistic expectations.

According to the recent software development trends, the average hourly rate of Indian developers lies around $19 to $40depending on their skill set and experience. On the other hand, American and UK-based developers charge at least $80 to $100/hour.

But yes, you can ask for a lower quote from remote offshore developers in India if you need bulk work hours or manpower.

2. Technical Requirements Of The Project

As the new study by IBEF now suggests, the Indian IT and BPM industry alone generated a massive revenue of $194 Billion with a YoY growth of 2.3% last year. So, there is no shortage of skilled developers in this booming industry.

However, the project cost will vary depending on the experience of the developers you need to meet the short-term and long-term goals of your project. While outsourcing your tech project to offshore developers, be very clear about the required experience. 

According to a recent report by CNBC, Bangalore alone houses 44% of the unicorn startups in India. And we at FlipKoins also believe in that scalability to ensure rapid growth and optimum output while working on any offshore projects.

3. TAT And Development Timeframe

According to the 2021 Tholons Services Globalization Index, India ranks among the top digital nations and is one of the largest developers of SaaS products. And best Indian developers know how to handle pressure to generate optimum but time-bound output.

Another study by Statista also claims that India produces more than 2.6 million STEM graduates each year, second only to China. So, there is no shortage of credible developers who can yield better results in the shortest possible time.

While most offshore developers in India tend to charge more for a shorter timeframe, we at FlipKoins always hire developers who can execute any project in a time-specific manner.

4. Skills And Expertise Needed

The cost of offshore software development also lies in your hiring parameters. And there are three different options available in the offshore industry: hiring a dedicated team, hiring developers on fixed monthly rates, and hiring them on hourly rates.

However, the rate of these three options can also vary depending on the skillset you need. According to a new report, the basic remuneration in the app development industry is likely to increase by 3.8% yearly. So, you also need to consider the gradual increase of the overall project cost with time.

Developers proficient with PythonNodeJSReactJSReact NativeRuby on RailsPHP, and Java now gets 15% more yearly remuneration than the previous year. And according to a new study by W3Tech, more than 77.6% of digital products use PHP as their server-side programming language.

5. Location And Cost Of Living

The geographic location and the cost of living are directly proportional to the expected project cost. And according to a new report by Numbeo, the cost of living in India is 64.4% lower than in the USA. Another report by The Global Economy also suggests that India stands at 35th place in the cost-of-living index among 39 Asian countries.

The newest statistic on GitHub also suggests that India will have more than 10 million software developers by the end of 2023, with more than 1.8 million new engineers entering the development industry each year. So, the fierce competition and the lower living cost indeed give an edge to the best offshore development companies in India

We at FlipKoins hire enthusiastic and compassion-driven developers at a lower rate than in the USA. So, we also assure at least 65% lower manpower cost for your next dream project.

6. Additional Costs 

As per the global market spend report by Statista, the outsourcing and shared services industry is likely to touch $971.2 Billion in operating revenue by the end of 2023. Another study by Clutch also claims that more than 52% of the small businesses in the USA alone are now planning to outsource their projects.

However, new clients in this industry are prone to hidden liabilities that offshore development companies often exploit. Besides, the real-time project cost can even increase if the development team is not competent and agile enough to predict the changes needed.

FlipKoins firmly believe in transparent project quotation and financial assessment without any hidden cost or additional monetary liabilities. We also strongly emphasize the right coordination between the projected and actual costs while your digital product meets its end goal.


The actual cost of offshore software development depends on several factors we have mentioned above. However, there are several benefits of hiring developers in India vs. any other country in the world, as India has a lower living cost along with an ample supply of credible software developers.

So, if you are looking for the best possible quotation for your next dream project, feel free to contact us or drop your query in the comment box to connect with us.

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