Study: India’s outsourcing industry continues to boom


Despite protests in Europe and the U.S. against outsourcing and the moving of jobs to India, the country’s software services and business process outsourcing (BPO) services business is booming, according to data released Thursday by the National Association of Software and Service Companies (NASSCOM) in Delhi.

India’s software and services exports business recorded revenue of US$12.5 billion in the year to March 31, up by 30.5 per cent over revenue of US$9.6 billion in the previous fiscal year, according to NASSCOM. The revenue figures include billings by Indian outsourcers and wholly-owned software development and BPO operations in India of multinational companies.

The U.S. and U.K. markets accounted for about 85 per cent of revenue, NASSCOM said.

“Despite the challenges such as slow growth of IT spending globally, a jobless recovery in major markets and appreciation of the Indian rupee (against the U.S. dollar), the Indian software and services industry has been able to maintain its growth momentum and consolidate its partnership with overseas customers, adding to their competitiveness,” said Jerry Rao, chairman of NASSCOM.

India’s software and services exports are projected to grow by about 32 per cent in the year to March 31, 2005, to reach revenue of over US$16.3 billion, according to NASSCOM.

Of the total software and services exports in the year, revenues from IT services, products and technology services grew by 25 per cent with revenue of US$8.9 billion, while the BPO business grew by 46 per cent to revenue of US$3.6 billion, and added 70,000 new jobs. BPO subsidiaries of multinational companies accounted for 65 per cent of BPO revenues.

Aiming to cash in on the high growth in the software and services sector, the industry has attracted new investments. In the year, 112 start-up companies set up operations, up from 47 in the previous fiscal year, according to Kiran Karnik, president of NASSCOM.


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