Growth of BPO Sector in India

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Growth of BPO Sector in India during the first half of 2007 was showing a moderate trend of growth which is registered at 14%. Five years ago, the growth in this sector was quite low due to less contracts but the situation is worse now. However, the growth of the BPO sector is expected to improve.

The BPO and KPO sectors in India have been showing some positive signs with demands from western countries increasing manifold due to the availability of cost-effective labor in India, which is highly skilled and also fluent in English. The BPOs in India are focused on increasing the growth through change in pricing techniques. Pricing in a BPO is supposed to be based on the value added to the business. So a remarkable change is in store as the BPOs in India work towards their full potential.

Of course, the big boom in the BPO industry in 2003 had generated a lot of employment opportunities and continues even today. Nevertheless, Indian BPO sector is facing competition from countries like Philippines, Mexico, Malaysia, China, and Canada. The expected growth of this sector in 2003 was 25%. Nations like the United States and Europe are showing great interest in increasing their investments in the Indian BPO sector.

India has an edge over other countries as we consider the following:

  • Tech savvy professionals
  • Cost effectiveness
  • Superior competency
  • Business risk mitigation
  • 24 hour service
  • Economy of scale
The trends in growth of the BPO sector in India are as follows:

  • 2003 - USD 2.8 billion
  • 2004 - USD 3.9 billion
  • 2005 - USD 5.7 billion
The growth in the BPO sector of India in 2004 was mainly due to the demands from the two segments – BFSI and telecommunications. There were low telecom costs for the leased lines and 400 companies were part of the BPO sector of India. The companies that were involved included third parties, Indian companies, and multinational corporations.

Growth of BPO sector in India has been truly impressive in recent years, but things can get even better, according to market analysts. India stands out already as a market leader as far as BPOs are concerned and so India also attracts huge foreign investments which are extremely essential since the Indian economy is expected to have an unprecedented growth in the years to come.


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