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"There is good competition from China and Malaysia, but India scores higher in terms of cost savings, both on the manpower and infrastructure front."

Chennai , Sept. 21

THE last time you checked around, were you told that India is losing space reputation as a low cost service provider? That its cost advantage was fast disappearing? That China is sure to push India aside? Hold on. Looks like that that's not true yet.

At least, for players providing business process outsourcing services in the banking and finance space.

Ms Sanjukta Pal, Principal Consultant, PricewaterhouseCoopers, said that India figured high in the priority list of organisations in the West looking to outsource.

She was delivering an address at a roundtable for a theme titled, `Enabling ITES in banking and financial services and insurance'.

She said, "There is good competition from China and Malaysia, but India scores higher in terms of cost savings, both on the manpower and infrastructure front."

According to her, cost of operations in India are 37 per cent lower than in China and 17 per cent lower than in Malaysia.

Manpower costs were 61 per cent lower than China and 48 per cent lower than in Malaysia. On the rentals front, costs in India were a third of China's while they were on par with Malaysia's.

Addressing the audience at the same roundtable, Mr K.K. Srinivasan, Chief Credit Officer, Compu Credit Corporation, US, said, "It is important that Indian ITES vendors avoid unnecessary poaching among themselves." He said that a client to a local ITES vendor would spend a significant amount — in time and money — in training new recruits.

"If this manpower is poached, then this affects the savings that I would have otherwise had by outsourcing to India."

He stressed that India had a large pool of skilled manpower and that vendors would be better off picking them afresh and training them rather than look at short-terms such as poaching.

Compu Credit outsources a good chunk of its telemarketing, data entry, customer service and collections operations to an Indian-based ITES provider, Allsec Technologies.

Mr Rahul Singh, CEO, e-Serve International Ltd, a Citigroup affiliate, said, "Our estimates are that by 2008 to 2010, ITES opportunities in the BPO space (including export opportunities) in India alone would be $7 billion to $8 billion.

The banking space in India is itself only $12 billion to $13 billion. This means that the BPO industry would be between 60 and 70 per cent of the country's banking base.

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