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India BPO Industry to Grow
By Muntazir Abbas
Delhi, Oct 20, 2008 1759 hrs IST
At a time when the US economy is reeling under the financial crisis, the domestic market needs a well-managed approach to overcome global economy havoc. The situation is not so gloomy, although ICICI, the largest private bank in India, has suffered looses at a tune of Rs.375 crore.
India is one the major markets for large overseas companies and lucrative outsourcing destination. According to NASSCOM chief- Som Mittal., IT and ITES services are growing at a faster rate and are poised to generate nearly $ 60 billion in revenue by 2010. With the global financial turmoil, India is expected to benefit from its BPO and IT/ITES offshoring services.
Kamal Nath, Commerce and Industry Minister, while participating in the India-EU Business Summit was quoted as saying that short and medium term fundamentals of the Indian economy were sound, the country could not remain insulated in the long term from such a crisis.
The Indian BPO industry is poised to grow nearly five-fold to $ 50 billion by 2012, a study by India's National Association of Software and Services Companies (Nasscom) and consulting organization Everest Group said. The Indian BPO industry employs about 700,000 people across 25 countries and accounts for about 40 % of the total global BPO offshore market. The industry aims to provide direct employment to over 2 million people in next five years in India alone.
However, according to IMF sources, India holds a good share in the global offshore IT and ITES (IT-enabled services) market, of which around 60 % comes from IT and 40 % from ITES. They, together contributes to about 5% of India's GDP. The industry is poised to fare better in revenue, if industry insiders are to be believed. India's Union Budget 2008-09 focuses on improving infrastructure and encouraging all sources of investment, in order to achieve growth in the Eleventh Five-Year Plan (2007-2012).
"Taking the ongoing economical crisis in US into account, the scenario is painful for a shorter term but it's an opportunity for the country like India as more companies may outsource business in an effort to cut operational cost," said Pavan Vaish, CEO of IBM-Daksh Global Services. "A lot of will come out of it in off-shoring business in future," added Vaish.
Praveen Senger, head (software and services industry vertical research) of IDC India, talked about the future of the BPO Industry. He said that with a CAGR of 43% as compared to 25% of IT outsourcing, the BPO outsourcing shall surpass it in 2012. K. V. Subramaniam CFO of Oracle Financial Services said that outsourcing is not an option but a necessity for any business. So despite the small hiccups, like the current financial crisis, outsourcing industry will only grow stronger.
India has held top position for three consecutive years since 2005 as one of the most attractive markets for retailers worldwide in the annual A.T. Kearney Global Retail Development Index (GRDI). If the market analysis, irrespective of current US economy, goes true then the retail sector is expected to grow from $330 billion to nearly $450 billion by 2010 and $630 billion by 2015.
"Success and failures are the great teachers. Having a good product or service is not necessary, the core value lies in innovation", feels Navyug Mohnot, CEO and founder, QAI, India. "Customer-centric and long-term strategy, as well as innovation and differentiation is needed in order to retain market, he said.
Related links:
Right Choices Needed for Indian BPO Market to Grow
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