CMN Bureau


BANGALORE, INDIA: The Indian BPO industry, which is currently $11 billion, has the potential to touch $50 billion by 2012 and can add 2.5 per cent to India's GDP from exports, according to Nasscom and Everest report on 'Roadmap 2010- capitalizing on the expanding BPO landscape'.

Speaking to the media here today, Gaurav Gupta, country head of Everest Group, said that the global addressable market is $220-280 billion and only five per cent of it is tapped.

"With the current momentum, the Indian BPO industry can reach $30 billion, but if roadblocks are removed and nurtured better, the BPO industry has the potential to grow five folds in next five years and create over two million direct jobs in India," Gupta said.

Raman Roy, chairman and managing director, Quatrro, said, "The right choices by stakeholders of the Indian BPO industry will decide and impact this potential five fold growth."

"We need people in entry level, middle management and in leadership role. As we move to Tier B and C cities, there is a need for better physical and social infrastructure facilities in tier B and C cities. India, having pioneered outsourcing industry, is under the threat of leaving the space vacant and making opportunities for other countries," Roy said.

Roy said that the BPO industry is still in a nascent stage. Tax benefit, which will come to an end in 2009, has to be extended to help the new and growing firms and to facilitate the industry to achieve its potential.

"Overall stakeholders will have to manage multiple internal and external constraints in order to capture a significant part of the available opportunity," he added.

The report has put forward eight action themes for the stakeholders in order to realize its potential, to achieve the target and to maintain the growth trajectory in the next five years.

Currently the BPO industry employs 700,000 employees across 25 countries and accounts for approximately 40 per cent of the global BPO offshore market. It is growing at a rate of 35 per cent over last five years.

Key client geographies include North America and UK and key vertical include banking, capital market, insurance, technology, telecom and manufacturing.

Customer interaction and support forms 42 per cent of the service offering, followed by specific BPO services, which constitute 27 per cent. Knowledge service has the potential to constitute 10 per cent provided the skilled talent is available.

The domestic Business Process Outsourcing market with a growth rate of 50 per cent over the last five years has grown faster than the overall Indian BPO market to reach nearly $1.6 billion by FY2008.

Tapping significant opportunities for domestic businesses, such as Banking, Retail, Insurance, Media, Telecom and Government provides an additional $15-20 billion opportunity for the industry.

Talking about US recession and rupee appreciation, Som Mittal, Nasscom president, said that since only five per cent of the business being tapped by India, there are opportunities beyond US dollars. The game is beyond cost arbitrage like talent, expertise, and capabilities.