Avinash Bachani

• Purpose: The study is aimed to determine the Incentives for German SMEs to offshore their business activities in India and China. Design: This study is based on quantitative approach. Primary and secondary data is being used in the study. The data was collected from individuals working in different SMEs in Germany, having relative offshoring experience. Theories from the articles, peer reviewed journal along with relevant books were consulted throughout the study. Findings: The findingssuggest that the benefits and advantages of offshoring strategy in India and China are cost efficiency and technology. Moreover, the challenges that are being faced by the firms while executive offshoring strategy is cultural mix especially language/cultural barriers, security issues and loss of market performance. Originality and Value: The study on incentives of German SMEs to offshore business activities in India and China enables me to understand why companies are interested in offshoring strategy in low cost countries for expanding their business while evaluating the challenges, merits and demerits of offshoring