Indian outsourcing grows

India's exports of software and services has grown by 26.3%, reaching $9.5bn (£5.8bn), according to estimates from the...

India's exports of software and services has grown by 26.3%, reaching $9.5bn (£5.8bn), according to estimates from the Delhi-based National Association of Software and Service Companies (Nasscom).

Revenue from business process outsourcing (BPO) services and related services such as call centres grew by 59% to $2.3bn (£1.5bn), while revenue from export of IT services such as software development grew by 18.3% to $7.2bn ($4.4bn).

The growth in BPO services revenue reflects a growing trend by US and European companies to outsource services such as call centres and back office operations to their Indian subsidiaries and other companies in India.

Growth in IT services revenue from areas such as software development and design services business were lower in the year to March 2003 compared with the 22% growth in revenue posted by the previous year, and far lower than the growth rates of more than 50% posted year-on-year by the sector about three years ago.

IT services margins are also under severe pressure, and will go down further, said Kiran Karnik, president of Nasscom.

Key software services companies such as Wipro and Infosys Technologies, both based in Bangalore, said they were under intense pressure from customers to lower prices.

The pressure has left the relatively newer BPO services industry as the sector with a promising forecast. Revenue from BPO and related services is predicted to grow to 54% next year to $3.6bn (£2.2bn).

John Ribeiro writes for IDG News Service

Read more on IT outsourcing

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close