OUTSOURCING INDUSTRY - India and Outsourcing

India has been a pioneer in providing outsourcing solutions and has been providing a range of outsourcing services to countries across the globe. Combined revenue of the IT and IT Enabled Services (ITES) that includes Business Process Outsourcing (BPO) was USD 52 billion in the year 2007-08.

Inspite of severe financial and banking crisis affecting the world's economic growth, many of the IT, BPO and KPO companies in India are maintaining good success record. With a huge market size, India's outsourcing is still continuing to dominate the global outsourcing market. Though there are many competitors in the market like China, Malaysia, Philippines, etc., it is still the major player in the world in outsourcing due to its many advantageous factors. As a proportion of national GDP, the IT-BPO sector revenues have grown from 5.2 per cent in 2006-07 to an estimated 5.5 per cent in 2007-08. On the export front, revenue from ITES-BPO have shown a year-on-year growth of over 29.8 per cent (from 2006-07 to 2007-08). Also, direct employment in Indian BPO grew from 2,16,000 in year 2003-04 to 5,53,000 in year 2006-07. India has already registered its mark on the globe in IT-BPO sector. While, huge opportunities in KPO sector will help the Indian market climb the global value and knowledge chain.

At the Central level, the nodal agency responsible for the overall development of outsourcing and information technology (IT) industry has been the Department of Information Technology, Ministry of Communications and Information Technology.

Both at the Central and the State/ Union Territory (UT) level, several policy initiatives and measures are being undertaken to promote the sound growth of BPOs, IT and KPOs. The Department of Information Technology, under the Ministry of Communications and Information Technology, is the central authority responsible for outsourcing industry. While in States/ UTs there are concerned 'Department of Information Technology'. Besides, over 600 Multinational companies are known to be sourcing product development and engineering services from their centres in India. Thus, it is right to say that India is continuing to leverage its fundamental advantages of talent, cost, quality and early mover advantage/ experience to garner a large share of the growth in global sourcing of IT-BPO. Many other process outsourcing activities are also taking place in India like that of research, insurance, legal, etc.