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Alert issued on BPO health

New Delhi, Feb. 27: Rivals are sniping on the heels of Indian BPO firms, which have lost 10 per cent share to Chinese, Brazilian and Filipino players, the economic survey said.

However, the survey had some encouraging words for telecom and tourism. Telecom is set for a rebound, while tourism has posted an “above average performance” among the service sectors.

The survey said the BPO industry should organise information campaigns in developed economies to dispel fears about outsourcing.

After enjoying the top spot in BPO for the last several years, India is now facing stiff competition from countries in Asia, North Africa, Latin America, Poland and Ireland.

“According to Nasscom, in the last five years, India has lost about a 10 per cent market share in the BPO space, most of which is in the voice contract segment,” it stated.

In 2012-13, IT services in India will account for $50 billion, while business process outsourcing and engineering services will contribute $20 billion and $10 billion, respectively, Nasscom said.

Outsourcing has become a national issue in the US and the UK, where politicians and various lobby groups are supporting the local BPO industry as a means to provide employment to its citizens.

The survey said that telecom would perform better on the back of a host of recent policy announcements. “With the recent announcements of reforms measures, including mild relaxation in the monetary and credit policy, sectors such as retail, construction and telecom are expected to perform better.”

Though tourism has done well, the sector needs an immediate and drastic makeover.

Infrastructure into the sector should be attracted through public private partnerships. The survey said there was a need to address issues such as high luxury taxes on hotels by states.

 
 
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