New Delhi, Dec. 12: India is set to corner about $60 billion of the global offshoring business that will generate an over $300-billion market by 2010, according to the Nasscom-McKinsey study 2005.

This is just 10 per cent of the addressable market. With better infrastructure and additional spending in the range of $700 million to $1 billion, the IT-BPO sector can tap about $150-180 billion during the next five years.

The industry will generate more than 1 crore direct and indirect jobs by 2010.

Indian software services and BPO export revenue is likely to grow at 25 per cent year-on-year till 2010 to touch $60 billion, Jayant Sinha, partner of McKinsey and Company, said.

If this projected growth is achieved, the offshore IT and BPO industries can contribute to 17 per cent of the country?s GDP by 2010. It will also account for over 44 per cent of export growth over the next five years, Nasscom chairman S. Ramadorai said.

The offshore business of IT and BPO industries accounts for 65 per cent of the global offshore IT market and 46 per cent of the global BPO market.

?Moreover, export growth can be accelerated through extensive innovation by various industry stakeholders, which could generate an additional $15-20 billion in export revenue over the next 5-10 years,? Sinha added.

The future revenue for the IT-BPO sector will flow from traditional industries like deposits and lending, credit cards and mortgages in retail banking and cross-industry functions such as human resources and finance and accounting. IT outsourcing services such as hardware and software maintenance, network administration and help-desk services will account for 45 per cent of the total addressable market for offshoring and are likely to drive the next wave of growth.

?Service lines that have driven recent growth, like application development and maintenance and R&D services, have already been explored 30-35 per cent and are not likely to grow dramatically,? said Noshir Kaka, partner, McKinsey.

?About 10 million jobs can ultimately be relocated from source countries to low-cost offshoring locations; our model indicates that approximately 4-4.5 million jobs will actually be offshored by 2010,? said Kaka.

The study has also warned that the global BPO industry is more likely to be supply-constrained due to significant talent shortfalls within the ?receiving/service geographies?.

According to the study, India?s leadership position is built on five main advantages: abundant talent, creation of primary infrastructure, operational excellence, a conducive business environment, including several favourable policy interventions such as telecom reforms, and growth in the domestic IT sector.

The IT-BPO sector has grown roughly three-fold between 2000 and 2004 ? from $4.0 billion in 2000 to $12.8 billion in 2004 ? accounting for 6 per cent of the increase in GDP between 2000 and 2004.

?Today, these two industries directly employ nearly 700,000 people and provide indirect employment to another approximately 2.5 million,? said Kaka.

India?s challenge is to sustain its leadership position by rapidly growing the market for offshore services and maintaining its current market share despite intense competition from other low-cost locations such as South Africa, China and Eastern Europe, the report says.

To do that, India needs to improve talent supply and bridge the possible shortfall of nearly 0.5 million qualified employees ? nearly 70 per cent of which will be concentrated in the BPO industry. It also needs to strengthen infrastructure.

?Between today and 2010, we estimate that the IT and BPO industries will have to employ an additional workforce of approximately 1 million in New Delhi, Bangalore, Hyderabad, Chennai and Mumbai, and about 600,000 workers across other towns in India,? said Vivek Pandit, partner of McKinsey.

The report says infrastructure demands can be met through a few bold initiatives. Moreover, creating a single-point responsibility for developing and maintaining local infrastructure will help remove bottlenecks.

If these measures are met, India?s offshore sector could become a great export hub on a par with France?s luxury goods and Japan?s automotive industry.