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BPO: India likely to retain edge over rivals

BS Economy Bureau in New Delhi | April 28, 2004 10:31 IST

Thanks to a large English-speaking population and a steady flow of knowledge workers, churned out by the education sector, India is expected to retain its advantage over rivals in the business process outsourcing market.

According to the Goldman Sachs second Bric report released on Tuesday, after the US, India has the second largest English-speaking population, with an estimated 7 per cent of the one billion people speaking the language, while an estimated two million infotech professionals are expected to be added to the existing 650,000 knowledge workers over the next 10 years.

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"Estimates point out that the supply of infotech professionals will outstrip demand by 48,000 in 2008, suggesting that a healthy supply of infotech workers will also curb wage inflation pressures," the report said.

It, however, warned that the BPO jobs would only account for a small share of India's labour market and would not be an answer to labour problems.

Infotech professionals accounted for just 0.1 per cent of India's workforce and even if the number of jobs outsourced from the US to India doubled from the current 3-4 million over the next decade, it would only represent 1.5 per cent of India's labour pool, the report said.

"A significant proportion, but not all of the jobs offshored from the US could go to India, but offshoring is not the answer to India's broader labour sector woes, as some make it out to be," the report said.

Referring to the recent backlash against outsourcing in the US as an "election-year issue", the Bric report said India's infotech exports had a small share of the global pie, with the Indian software and services exports industry accounting for about 2 per cent of the world infotech spending.

Besides infotech, the report said, opportunities existed in accounting, financial services, medical services and the pharmaceuticals sector. In the pharma sector alone, offshoring opportunities could double to $50 billion by 2007, it added.

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