Factor Cost Advantage

Economy of Scale

Business Risk Mitigation

Superior Competency

Utilization Improvement

Growth of the Indian BPO Industry

The ITES or BPO industry is a young and nascent sector in India and has been in existence for a little more than five years. Despite its recent arrival on the Indian scene, the industry has grown phenomenally and has now become a very important part of the export-oriented IT software and services environment.

The highlights of the Indian ITES-BPO sector for 2004-05, were as follows (Source: Nasscom): -

The ITES-BPO segment accounted for around 30 percent of the total IT-ITES exports from India.

The sector grew at 44.5 percent to log in revenues of $ 5.2 billion in FY 2004-05.

ITES-BPO exports are expected to touch revenues of USD 7.3 billion in FY 2005-06.

The ITES-BPO employee base grew at a CAGR of 52.6 percent, from 42000 in 2001-02 to 348000 in FY 2004-05.

As of March 2005, there were around 410 ITES-BPO players, up from 285 in FY 2003-04.

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* Contributed by -
Anirban Majumdar & Kamal Poddar,
Indian Institute of Management,
Kozhikode, Kerala.