Indian ITeS-BPO segment to clock exports of USD $10.5-11 billion in FY08

According to the annual NASSCOM survey, in FY 07, the Indian ITES-BPO segment grew by 33.5% per cent contributing USD 8.4 billion to the total software and services exports of USD 31.4 billion.

Speaking on the findings of the survey, Kiran Karnik, President, NASSCOM, said, “The ITeS-BPO segment continued to grow at a scorching pace, to record export revenues of USD 8.4 billion in FY07. We expect segment revenues to grow at around 30% next year, to clock exports of USD $10.5-11bn billion in FY08. The Indian BPO sector has witnessed significant transformation over the past decade. Starting with basic data entry tasks, it now includes increasingly complex processes.

The domestic market has also contributed to the growth of the segment as a whole and we expect on-going momentum considering the large addressable market that it offers. Overseas M&A, along with increase in scale and depth of existing service lines, has complemented the growth of this segment.”

Steady growth was observed across the following key service categories

Finance & Accounting (F&A)
Customer Interaction Services (CIS)
Human Resource Administration (HRA)

Key highlights of the Indian ITES-BPO sector:

i) ITES-BPO employee base has grown to 553,000 in FY 07 from 415,000 in FY 06

ii) There has been strong growth in FAO demand along with steady expansion in emerging service lines (legal, risk mgmt) and overseas M&A complementing the organic growth of this segment.

iii) The domestic market for ITES-BPO grew to USD 1.2 billion in FY 2006-07 from USD 0.9 billion in FY 2005-06, illustrating a significant increase in demand.

In addition to the core categories of CIS, F&A and HR administration, there are several other vertical specific and niche business services being delivered from India. This segment is expected to account for approximately 8-10 percent of the total value of BPO activity undertaken in India.

Examples of these services include the various ‘high end’ knowledge based processes such as financial services research support and analysis for equity/debt/derivatives markets; econometrics, data analytics and modeling; business/corporate research/competitive intelligence; legal services, animation and game development services; medical transcription and basic; shared back-office and administrative functions.