India has huge potential in ITES, BPO: experts

Thursday, 23 January 2003, 08:00 Hrs
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HYDERABAD: India has huge potential in IT- enabled services (ITES) and business process outsourcing (BPO) and is well positioned to increase its share in the international market from the current $2 billion to $21 billion by 2008.

Speakers at the India IT Forum, which began here Wednesday, said India had tremendous opportunity to grow in the ITES and BPO sectors but also underlined the need to focus on key sectors to take on competition from China, the Philippines, Singapore and Malaysia.

The three-day India IT Forum is being jointly organized by the Confederation of Indian Industry (CII) and the Andhra Pradesh government to coincide with GITEX, the global IT exhibition of Dubai World Trade Centre that began here Wednesday.

Participants in the inaugural session on "BPO-India in the Global Market" said India should focus on the key area of infrastructure, bring down telecom rates, enhance its pool of talent, train English-speaking people to improve their accent, lay down a clear regulatory policy and cut down the time to give permissions for setting up ITES and BPO units.

"India will have to address these issues if it does not want to let the huge opportunity slip by," said Manish Kejriwal, of Mckinsey & Company.

He said India's biggest advantage was the two million graduates coming out every year and their English- speaking ability, and the low cost of labour compared to other countries.

"But it is not only about the cost but also about the quality of workers. The people working in the ITES companies in India are graduates and post-graduates while in Tennessee the same work is done by a person who has just about completed high school", he pointed out.

Kejriwal said India's share in the international market could dramatically rise to more than $21 billion dollars by 2008. He also dismissed fears that legislation in New Jersey State against government work being outsourced to Indian and other offshore companies would create problems.

"It has been hyped a lot by the media," he contended.

He also urged Indian ITES companies to diversify from voice services like processing of inbound service calls and outbound telemarketing calls to areas like finance, banking, human resources and administrative services.

James Dodd, chairman of Britain's ETT, a data integrating service company, said the global opportunity for ITES was projected at $611.4 billion by 2005 and India had the potential to address 38 percent of the market.

"What is required for further growth is continuing liberalization of telecom markets and the progressive easing of the licensing regimes and financial regimes and foreign exchange controls and, in long term, the provision of increasing amount of international capacity to allow data flow to and from India", he said.

Pramod Bhasin, president and CEO of GECIS Global and President GE Capital India, called for bringing down costs, saying they were still higher than those in China. He also stressed the need to move out from big cities to set up BPO units in lower cost cities.
Source: IANS
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