Indian BPO revenues reach $14.7 Billion
By siliconindia   |   Wednesday, 10 June 2009, 15:15 IST   |    7 Comments
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Indian BPO revenues reach $14.7 Billion
Bangalore: India being a favorite destination for outsourcing has been reflected by the growth that the BPO sector has witnessed. It has grown at a compound annual growth rate (CAGR) of over 37 percent to aggregate revenues of $14.7 billion in 2009 from $11 billion in 2008. Direct employment in this period has increased from 7,00,000 to almost a million people. According to NASSCOM, despite the tough economic environment, the BPO sector is expected to grow in 2010 and remain a net hirer. "The BPO sector has evolved from offering basic voice based services to high-end knowledge based services and has had an unparalleled impact on India's economic and social growth," said Pramod Bhasin, Chairman, NASSCOM and President & CEO, Genpact. Bhasin was speaking at the 11th annual NASSCOM BPO Strategy Summit in Bangalore. According to Bhasin, BPO revenues constituted one percent of India's GDP, and four percent of India's total exports in 2009 with indirect employment levels estimated to be around four million. According to NASSCOM McKinsey Perspective 2020 study, the total addressable market for the BPO industry is $630 billion. To achieve this potential, the industry has to gear up for challenges now. Today, the Indian BPO Industry faces competition from countries like Philipines, China, Vietnam, Brazil and Egypt, who offer incentives to attract global business. However, the economic slowdown has severely impacted the primary markets. The industry is faced with multiple challenges including decline in sourcing spend, price reductions, competition from other countries and protectionism. To address these challenges, the industry needs to find new avenues for growth and look at strategies to drastically improve operational efficiency. "Tapping industries like manufacturing, healthcare and retail, expansion into new geographies and driving domestic market growth would be critical going forward," Bhasin added. According to NASSCOM President Som Mittal, government support through extension of the fiscal benefits is very necessary. This is particularly important for SMEs as it will facilitate their continued growth, provide parity with incentives under the SEZ scheme and encourage industry to move into smaller cities.

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