India's back office sector to boom in next few years
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BANGALORE (Reuters) - India's booming business outsourcing industry, helped by a huge labour cost advantage, is expected to sustain its high growth rates as new business segments fuel growth, officials said on Thursday.
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"We see this industry growing at about 50 percent year-on-year for the next four to five years," Kiran Karnik, president of industry body National Association of Software and Service Companies, told a news conference at an industry seminar.
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| Exports of India's software and allied services rose 26 percent to $9.5 billion in the past year to March. Out of this, foreign revenue from the business process outsourcing sector soared 59 percent to $2.3 billion and is forecast to increase by 54 percent this year. |
| Karnik said new service lines such as content development, human resources and logistics offered enormous growth potential for the fledgling industry. |
| India's business process outsourcing sector, which includes customer call centres and back-office such as accounting and payroll management, has created about 100,000 jobs in the last two years alone, more than doubling the industry's total workforce to over 170,000. |
Global giants such as Dell, AOL Time-Warner and HSBC are among the companies that have set up large service centres in India, where local staff costs are a fraction of those in developed countries.
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| Leading Indian software services players including Infosys Technologies, Wipro and Satyam Computer have also begun to offer such services as they aim to become one-stop shops and provide services delivered remotely over high-speed telecom links. |
Karnik said India's business process outsourcing industry would not be affected by labour protection bills introduced in some U.S. legislatures by politicians seeking to make an issue out of the shifting of jobs to India.
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| At the national level, moves are under way to expand trade between the United States and India and a free-trade agreement would supercede any state-imposed restrictions on companies who use an Indian work force. |
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