India fast losing BPO edge- Forbes

By siliconindia staff writer   |   Thursday, 27 January 2005, 08:00 Hrs
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NEW DELHI:India’s cost advantage in the ITES sector is facing serious challenges from other English speaking nations like Philippines and China and in near future these jobs will move to these countries, Forbes magazine has reported.

According to the report, sustaining the jobs in India, which contributes substantially to India’s revenues, will be difficult. editor Paul Maidment said Philippines is becoming a serious contender to grab a chunk of the huge outsourcing pie. China is another growing rival that has the advantage of more comprehensive and reliable infrastructure than India. Besides, the Chinese diaspora is bigger than that of Indians, in US and South East Asia.

Another rival could be Vietnam or Seychelles or Mauritius where French is widely spoken and get access to European markets, he says.

India’s three big IT companies TCS, Infosys and Wipro get about 80 percent of their revenues from overseas market and 80 percent of it from USA alone and over dependence on USA should be avoided.

But a weakening dollar and proposal to ban outsourcing by nine states has put pressuer on India’s IT sector to diversifyand look at other markets.

There are two ways Indian companies can meet challenges, by moving into R&D and by more vertical integration by offering clients a better range of services, Paul said.

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