Business process outsourcing to India

Business process outsourcing to India refers to the business process outsourcing services in the outsourcing industry in India, catering mainly to Western operations of multinational corporations (MNCs).

As of 2012, India’s outsourcing industry employed around 2.8 million people and generated approximately US$11 billion in annual revenue, contributing about 1% to GDP.^[1] As of 2021, revenue of Indian BPO industry was estimated at US$ 38 billion.^[2] The Government of India launched the India BPO Promotion Scheme (IBPS) under the Digital India initiative to encourage job creation in Tier-2 and Tier-3 cities.^[3][4][5] India's BPO Industry handles 56% of the world's business process outsourcing.

History

A BPO hub in DLF Cyber City in Gurgaon, India

Amex

In the second half of the 1980s, American Express consolidated its JAPAC (Japan and Asia Pacific) back office operations into Gurgaon region.^[6]

General Electric

In the 1990s, General Electric launched back-office operations in Gurgaon under Pramod Bhasin, with Raman Roy leading the initiative. This operation, known as GE Capital International Services (GECIS), pioneered voice-based outsourcing from India before being spun off as Genpact in 2004.^[7] Raman for the first time tried out voice operations out of India. The operations in India were the Beta site for the GE Six sigma enterprise, as well. The results made GE ramp up their Indian presence and look at other locations.^[8]

In 2004 GECIS was spun off as a separate legal entity by GE, called Genpact. GE has retained a 40% stake and sold a 60% stake for $500 million to two equity companies, Oak Hill Capital Partners and General Atlantic Partners.

IT: The headquarters of Infosys, India's third largest IT company, is located in Bengaluru

Size of the industry

The Indian ITES-BPO sector grew by approximately 38.5 % in 2005, reaching revenues of US$7.2 billion with a workforce of about 415,000 employees.^[9] The global BPO Industry is estimated to be worth 120–150 billion dollars, of this the offshore BPO is estimated to be some US$11.4 billion. India thus commands about 63% of the global offshore BPO market, while accounting for only 5–6% of the total global BPO industry.^[10] The U.S. $7.2 billion also represents some 20% of the IT and BPO Industry which is in total expected to have revenues worth US$36 billion for 2006. By FY 2006, the ITES-BPO segment employed about 415,000 people, representing roughly 40% of the total Indian IT-ITeS workforce, which had surpassed 1 million employees in FY 2005.^[11][12]

A supporting ecosystem has emerged around BPO operations, including facility management, corporate transportation, catering, and outsourced security services, particularly for large office complexes housing BPO centers.

Registration of BPO as OSP

BPO, call centres, KPO, and other IT-enabled services that use telecom resources are regulated as Other Service Providers (OSP) under India’s Department of Telecommunications framework.^[13]

Under India’s OSP (Other Service Provider) regime, Application Services include tele-banking, tele-medicine, tele-education, tele-trading, e-commerce, call centres, network operation centres, and other IT enabled services, provided by using telecom resources supplied by authorized telecom service providers.^[14] The "Telecom Resource" means telecom facilities used by the OSP including, but not limited to, the Public Switched Telecom Network (PSTN), Public Land Mobile Network (PLMN), Integrated Services Digital Network (ISDN), and/or the telecom bandwidth provided by authorized telecom service providers licensed under the Indian Telegraph Act, 1885.^[15] The 'Company' means a company registered under Indian Companies Act including foreign companies permitted by RBI under Foreign Exchange Management Regulations and registered under Part-XI(Section 591 to 608) of the Companies Act, 1956 for setting up a place of business in India.^{[citation needed]} 'Domestic OSP' are the OSP providing the Application Services within national boundaries. 'International OSP' are the OSP providing the Application Services beyond national boundaries.^{[citation needed]}

General conditions of OSP registration

(1) Registration may be granted to any company to provide Application Services. These service providers will not infringe on the jurisdiction of other Authorised Telecom Service Providers and they will not provide switched telephony.^{[citation needed]} (2) The entities entitled for OSP registration must be a company registered under Indian Companies Act, 1956.^{[citation needed]} (3) A Company may apply for registration to the Authority in the proforma prescribed by the Authority from time to time.^{[citation needed]}

Online system for OSP registration

It is mandatory to get new Registration Number allotted by the Online OSP Registration system for the existing OSP Registrations. In case you have existing registered OSP sites for which you would like to get the new Registration Number from the system please contact Assistant Director General (ADG) of the concerned Telecom Enforcement, Resource and Monitoring Cell (TERM Cell)^[16] preferably before applying for the login-id from the system.

Bangalore, Chennai, Hyderabad, Gurgaon, NCR, Ahmedabad, Mumbai and Pune are Tier I cities that are leading IT cities in India.^{[citation needed]}

With rising infrastructure costs in these cities, many BPO's are shifting operations to Tier II cities like Nashik, Sangli, Aurangabad (Maharashtra), Mangalore, Mysore, Hubli-Dharwad, Belgaum, Coimbatore, Nagpur, Trichy, Calicut, Kochi, Trivandrum, Chandigarh, Mohali, Panchkula, Bhubaneshwar, Jaipur, Visakhapatnam, Raipur and Lucknow.^{[citation needed]} Jammu and Kashmir have become new hubs for outsourcing.^{[citation needed]}

Tier II cities offer lower business process overhead compared to Tier I cities, but have a less reliable infrastructure system which may hamper dedicated operations.^{[citation needed]} The Government of India in partnership with private infrastructure corporations is working on bringing all around development and providing robust infrastructure all over the nation.^{[citation needed]}

Criticisms

The BPO industry in India has attracted criticism from some observers.

• Sociologist Shehzad Nadeem observed that Indian call centre employees were often encouraged to adopt Western vernacular and temporary Anglo names when interacting with U.S. customers, a practice he argued could cause psychological stress and cultural tension.^[17] While this is true, Nadeem claims further that this temporary switch to an American-like identity inflicts psychological distress, and has led to the adoption of Western-style-consumer lifestyles by the employees, who earn far more than their compatriots.^[18]
• Jyoti Saraswati argued that the outsourcing industry’s political influence in India exceeds its economic contribution, enabling it to secure state support ahead of other sectors with potentially higher developmental returns.^[19]

See also

• India portal
• Business portal

General

• H-1B visa
• Globalisation
• Software Technology Parks of India
• Nalini by Day, Nancy by Night, 2005 documentary on outsourcing in India

Large BPO parks

• Tidel Park
• HITEC City
• Silicon Valley of India

Economy

• Economy of India
• Remittances to India
• Foreign trade of India
• List of exports of India
• Largest trading partners of India
• Information technology in India
• Indianisation