Indian outsourcing sees strong rebound
INDIA’S flagship outsourcing sector said yesterday it expected to post 19 per cent export growth in the current financial year, as it rebounds from the global economic crisis.Som Mittal, president of the National Association of Software and Services Companies (NASSCOM), said exports were expected to touch $59bn (£36.39bn) this financial year ending in March.The strong recovery comes after outsourcing saw exports grow just five per cent to $49bn (£30.32) in 2009-10, when the sector was buffeted by the global financial downturn.“It has been a spectacular rebound,” Mittal told a news conference.The outsourcing group had originally forecast export revenue growth of 13 to 15 per cent for the current year.Mittal, citing “pent up demand for information technology and business process outsourcing services,” forecast the sector’s export revenues would grow by 16 to 18 per cent to up $70bn (£43.17bn) in the next financial year to March 2012.US and other foreign firms, drawn by India’s vast, educated English-speaking workforce and labour costs that are lower than in the West, have farmed out a wide range of jobs from answering bank client calls to processing insurance claims and equity analysis.Mittal said a recent wave of protectionist sentiment in the US had “very little” impact as US companies needed to outsource to cut costs.“It has been rhetoric. When business needs something, you can’t stop them,” Mittal said, noting the US share of the outsourcing market had risen by one percentage point to 61.5 per cent in the current year.Outsourcing was a particularly heated issue in the US mid-term elections last November, which wound up with US President Barack Obama’s Democrats suffering heavy defeats.Mittal said the domestic outsourcing industry also grew strongly by 16 per cent to hit Rs787bn ($17bn/£10.48bn) in the current year to March.The Indian outsourcing sector directly employs some 2.54 million workers and accounts for 6.4 per cent of the country’s gross domestic product.India recently lost its crown to the Philippines as the call centre capital of the world. But Mittal said the Indian outsourcing sector was “leveraging technology” now to move up the value chain in its range of services.India continues to lead the overall global outsourcing market, increasing its share to 55 per cent in 2010, up from 51 per cent the previous year, Mittal said.
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