BPO jobs to leave India. It will bring gains to Bhutan, Philippines and China

Business

oi-Shoaib MD

By Shoaib Md

Published: Wednesday, August 24, 2011, 14:13 [IST]

The Indian outsourcing industry is searching out for new clients and new destinations for expanding their business and the base. Although the industry association, NASSCOM, is maintaining the growth projections of 16-18% in terms of IT exports in 2011-12. The industry leader, Genpact, is all set to foray in Bhutan.

During the Nasscom BPO Strategy Summit, Pramod Bhasin, vice-chairman Genpact, was quoted by one of the leading newspaper as, "We are all set to open our office in Bhutan and we hope to start the operations soon. Tiger (NV Tyagarajan) and his team are already working on it."

Further adding Bhasin said that the government of Bhutan is supporting the initiative. Since the educational qualification is similar in Bhuatan and India along with necessary English speaking skills. The low cost in Bhutan would also boost this move.

There was even a delegation present at the summit from Bhutan which promoting the country as the next BPO destination. Kezang, executive director, ministry of information and communications, government of Bhutan, said that the country was an ideal destination to start a BPO because of the conducive atmosphere as the government is stable and it is eager to set up outsourcing industry. Kezang also said that besides Genpact, Wipro and few other players are also going to start their operation in Bhutan.

Meanwhile, Som Mittal president Nasscom stated "There is no reason for us to be worried. We have spoken to customers and they are looking at expanding into geographies and bringing newer solutions to the market".

“In the last decade, the industry has grown 16 times in size, to reach $16.9 billion (including domestic) in FY"11. In addition to fueling India"s economy, direct and indirect employment creation is estimated at 4.5 million," added Mittal.

India is leading as a country for opening BPO services. India accounts for over 37% of the global sourcing BPO revenues. Other country on the heels are Canada and Philippines.

Bhasin was also quoted as, “Competition from China and the Philippines is a serious issue as the calibre of students coming from their colleges is better than ours."

Adding to the list of worry is that there is lower profitability in India, billing rates are also low, fiscal incentives are not there anymore and data security too is of low grade. All of these factors combined will have a negative impact on the industry.

The Nasscom-Crisil report called 'India Knowledge Services Industry", the knowledge services outsourcing industry in India is expected to grow at a 22.2% CAGR over FY2010-15 to a $5.6 bn market. Also, Business research should continue to be the most widely adopted service-line with a 39.4% share, representing a $2.2 bn opportunity. The share of data analytics is also expected to increase from 18.5% to 20.6%, it will be valued at approx $1.15 bn.

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