India’s BPO Industry: A Growing Powerhouse in the Global Market

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India’s BPO Industry: A Growing Powerhouse in the Global Market

 

 

The Business Process Outsourcing (BPO) industry in India has been growing rapidly over the past few decades. According to a report by TaskUs, India’s BPO industry is one of the largest and most successful in the world, thanks to its expansive and growing pool of English-speaking information technology (IT) professionals and investor-friendly tax structure, among other factors. The industry has contributed significantly to India’s GDP and has witnessed steady growth ranging from 1.2% to 5.4% .

The BPO industry in India offers a diverse range of services, including customer service, technical support, data entry, and back-office services, among others. Multinational companies continue to opt for call center outsourcing when it comes to their various business functions to BPO companies in India. By 2021, Indian companies were already responsible for 56 percent of the global business process outsourcing workload, with nearly three-fifths of revenue collected from call center outsourcing and the remaining from data entry and other IT-related services.

India’s BPO industry is expected to grow even further in the coming years. Experts predict that the increasing global need for IT services will fuel the growth of BPO industry in India for the next three years and beyond. The country’s industry is set to acquire additional gains in the near future.

In conclusion, India’s BPO industry has been growing rapidly over the past few decades and is one of the largest and most successful in the world. The country’s expansive and growing pool of English-speaking IT professionals and investor-friendly tax structure are some of the factors that have contributed to its success. The industry offers a diverse range of services and is expected to grow even further in the coming years.

 

The BPO industry in India has faced several challenges over the years. Some of the major challenges include poor internet connectivity, frequent power outages, and political instability in the form of shutdowns and strikes. These disruptions have taken a toll on the operations of BPO firms, which have to operate on a 24/7 basis.

The COVID-19 pandemic has also significantly disrupted the BPO industry in India. The countrywide lockdown has resulted in a cascading effect that has brought down the BPO industry to its knees. The business houses that needed services from the BPO industry to support their retail operations do not need it since the entire retail market/distribution channel is totally shut. This led to the loss of business for such BPO companies that were supporting these kinds of business verticals. Telemarketing business got halted 100% due to the above reasons. Many customers not only asked to suspend business but also enforced “Force Majeure” clause inflicting heavy losses to BPO companies.

Work-from-home for BPO companies is not that easy as it was perceived. These companies are caught between mobility curbs and client protocol that disallows work-from-home. Client protocol that disallows transfer to work-from-home mode (banking in particular or any other process where data sensitivity is very high) coupled with employee’s inability to commute to the office is leading to large scale stoppages. The voice-based process is most impacted. IT infrastructure issues are another weak link, which is making work-from-home difficult. Providing essential setup such as laptops/desktops, ensuring internet connectivity at the agents’ houses to dispersed locations across the city during the lockdown with obstructed transportation became a serious deterrent. Internet dongles’ non-availability, desktops do not work on WIFI/smartphone hotspot have added to the woes. Even wherever work-from-home could be enabled, the connectivity was overwhelmed, as a huge number of users were trying to access systems remotely. Bandwidth/servers were not designed for such a scenario. This led to enhancing capacity resulting in additional capex and opex.

In conclusion, India’s BPO industry has faced several challenges over the years, including poor internet connectivity, frequent power outages, and political instability in the form of shutdowns and strikes. The COVID-19 pandemic has further disrupted the industry by bringing down businesses and making work-from-home difficult for many companies.

 

The future of India’s BPO industry is promising. According to a report by Life Beyond Numbers, the BPO industry in India is expected to grow further in the coming years, thanks to the country’s innovative IT infrastructure and a growing pool of English-speaking professionals who are experts in the field. The report also states that the BPO sector was expected to reach $220 billion by 2021, and thanks to the growing importance of data analytics, eCommerce, IT, and process automation, the future of BPO industry is rather bright..

Another report by Business Standard shows that as India reopens, enterprise spending on business process outsourcing (BPO) services in India is set to grow at a compound annual growth rate (CAGR) of 5.8 percent to reach $8.8 billion by 2025. The report also highlights that the push for outsourcing knowledge-based and vertical-specific processes will drive this growth.

In conclusion, India’s BPO industry is expected to grow further in the coming years. The country’s innovative IT infrastructure and a growing pool of English-speaking professionals who are experts in the field are some of the factors that will contribute to its growth. The push for outsourcing knowledge-based and vertical-specific processes will also drive this growth.

 

The Indian government has taken several measures to support the growth of BPO companies in India. One of the most significant measures is the India BPO Promotion Scheme (IBPS), which provides financial support to eligible companies in the form of Viability Gap Funding (VGF). The scheme aims to create employment opportunities for the youth by promoting the IT/ITeS industry, particularly by setting up BPO/ITeS operations in smaller cities. It also aims to promote investment in the IT/ITeS sector to expand the base of ITeS industry and secure balanced regional growth. The IBPS has a total budgetary outlay of Rs. 543 Crore and seeks successful establishment of 48,300 seats in respect of BPO/ITeS operation across the country (except NE).

Another scheme is the North East BPO Promotion Scheme (NEBPS), which provides financial support to eligible companies with similar objectives as IBPS but focuses on promoting investment in IT/ITeS sector in North Eastern Region. The NEBPS has a total budgetary outlay of Rs. 50 Crore and seeks successful establishment of 5,000 seats in respect of BPO/ITeS operation in North Eastern Region.

The Indian government has also liberalized regulatory guidelines for the BPO industry to ward off competition from countries like the Philippines, Malaysia, Mexico, and Canada. This has helped India’s BPO market grow further and is expected to reach $8.8 billion by 2025.

In conclusion, the Indian government has taken several measures to support the growth of BPO companies in India. The IBPS and NEBPS are two significant schemes that provide financial support to eligible companies with objectives such as creating employment opportunities for youth and promoting investment in IT/ITeS sector. The government has also liberalized regulatory guidelines for the BPO industry to ward off competition from other countries.

 

 

 

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