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India will have to tackle future challenges, such as rising costs, talent shortfall, infrastructure constraints, increasing risk perception, protectionism, and deteriorating business environment, in order to maintain its current competitive streak and dominance in global IT outsourcing landscape, according to the Economic Survey 2010-11 .
Highlighting the role of IT-BPO in projecting India's brand identity as a knowledge economy, the pre-Budget document also drew attention to other issues as well. “These include shifting from low-end services to high-end services…in the light of competition in BPO from other countries and policies in some developed countries like the UK to employ locals; addressing data protection issues as half of offshore work does not come to India.”
The observation comes at a time when countries such as the Philippines and even South Africa have upped the ante in attracting BPO investments. As it is, the Philippines has cornered a fair share of new investments in voice-based BPO services.
‘Totalisation agreements'
The Survey further states that other measures which need to be looked at include “concluding totalisation agreements with target countries to resolve the social security benefits issue as is being done now; and increasing the coverage and depth of IT and BPO services in the domestic sector.”
When contacted, Nasscom President, Mr Som Mittal, said, “As far as some of the issues are concerned, the industry and academia are already taking the necessary steps, and for other issues it would hopefully trigger action at the Government level.”
Mr Mittal was referring to issues pertaining to the domain of the Central Government (say, tax incentives and educational reforms) and State Governments (physical and social infrastructure).
For the record, IT-BPO exports are expected to grow by at least 18 per cent in 2010-11 to reach $58.7 billion as against $49.7 billion in 2009-10. The Survey also noted that the cumulative export figure in electronics during 2010-11 (April to July) is estimated at $1.36 billion (Rs 6,259 crore) whereas during the same period in the previous year, exports of electronics amounted to $1.92 billion (Rs 9,339 crore).
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