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What is an Offshore Development Center (ODC) in India?

Written by Vaibhavi Vaidya. Reviewed by Ranjana Vaidya, CA. Last reviewed 25 October 2026. 3 min read

Quick answer: An offshore development center (ODC) is a team in India that a vendor recruits, employs and seats, but which works only on your product. You direct the roadmap. The vendor holds the Indian employment contracts, pays PF and TDS, and bills you a monthly fee that usually bundles salary, office, equipment and its margin.

  • The ODC vendor, not you, is the legal employer under the Labour Codes in force since 21 November 2025.
  • An ODC vendor billing a foreign client can zero-rate GST only if all five export conditions in s.2(6) of the IGST Act are met.
  • From 1 October 2026, software export proceeds must be realised within 9 months of the invoice (12 if invoiced in rupees).
  • You own nothing in India unless the contract adds a buyout clause.
On this page
  1. How does an ODC work in practice?
  2. How is an ODC different from your own team in India?
  3. What changed for ODC vendors in 2026?
  4. How does Remunance compare with an ODC vendor?
  5. What else do people ask about ODCs?

How does an ODC work in practice?

You rent a ring-fenced team. The vendor supplies people, seats, laptops and day-to-day HR.

Most ODCs run on a master services agreement with a statement of work per team. Fees are usually per head per month. Some vendors add a fixed management fee.

The legal chain matters more than the price. Your rights in the code pass from each developer to the vendor, then from the vendor to you, so both links need written IP assignment. Our guide to offshore development centres in India covers the commercial side, and the ODC location guide compares cities.

How is an ODC different from your own team in India?

Control and exit cost. An ODC is quick to start but hard to take with you.

QuestionODCEOR teamGlobal capability centre
Who picks each hireVendor, with your approvalYouYou
Who holds the employment contractVendorEORYour subsidiary
Who sees salary dataVendorYouYou
What leaves with you at exitCode, if assignedCode and the people, with consentEverything

Suppose your vendor pays a developer ₹1,50,000 a month and bills you a flat per-head rate. You never see the split between salary and margin. With an EOR or a GCC, you set the salary yourself.

Many firms later convert an ODC into a build-operate-transfer deal, which adds a priced option to take over the team. Others compare the ODC with staff augmentation, where individual engineers join your existing squads instead.

What changed for ODC vendors in 2026?

The paperwork behind each export invoice changed. From 1 October 2026, the RBI’s FEMA export regulations replaced the old SOFTEX form with an Export Declaration Form filed within 30 days of month-end.

Hence a vendor that bills you late or loosely risks delays on its side. Ask how it files.

How does Remunance compare with an ODC vendor?

Remunance gives you an ODC’s convenience with your own team’s transparency. As your employer of record, we employ the people you choose, at salaries you set. Employment costs pass through at cost, plus a flat fee from USD 99 per employee per month. Laptops, workspace coordination and background checks come bundled. If you want to price both models side by side, get a costed India team plan.

What else do people ask about ODCs?

What is the full form of ODC in IT?

Offshore Development Center. It is a dedicated vendor team, usually in India, that builds software for one client.

Is an ODC the same as outsourcing?

Not quite. Project outsourcing buys a result. An ODC gives you a standing team whose work you direct.

Can you hire ODC staff directly later?

Only if the contract allows it. Without a transfer or buyout clause, the vendor can refuse, so negotiate exit terms before you sign.

Browse all 170 terms in the glossary

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