IT-BPO perfo strong in 2006; rise in MNC investment

Bangalore, Dec 27: The year 2006 revalidated the Indian IT-BPO growth story, with the industry performance remaining strong and leading firms reporting above expected growth rates in the first half of the fiscal.

IT firms continued with their steady expansion into newer service lines and increased geographic penetration during the year, which also witnessed an unprecedented rise in MNC investments in spite of lingering concerns about gaps in talent and infrastructure impacting India's competitiveness, NASSCOM said here in a review of the IT-BPO industry performance in 2006.

NASSCOM said that at a broader level, the past 12-18 months have witnessed evolution of global perspectives about offshore outsourcing from a mix of heightened exuberance and protectionist criticism to a wider, more rational acknowledgement of economic imperatives, value drivers as well as possible risks of this phenomenon. Maturing socio-political attitudes and a growing appreciation of the proactive efforts by key stakeholders to further strengthen India's value proposition were helping reinforce its position as the destination of choice, NASSCOM said.

Consequently, India remained an integral part of any major global sourcing strategy, though alternate destinations were being explored to add multi-country delivery capability of IT companies.

Positive market indicators including large unaddressed white spaces and the unbundling and/or renewal of IT-BPO mega-deals with increasing shares of global delivery strongly support the optimism of the industry in achieving its aspired target of US Dollar 60 billion in exports by 2010. Exports were expected to demonstrate growth rates between 28 and 30 per cent in 2006-07, NASSCOM said.

NASSCOM said the size and scope of the opportunity was enormous and the strategic advantages in realising its potential were significantly larger.

''While India is uniquely advantaged to best address these opportunities, they are not lost to others. Timely, coherent and continued action will be the key to ensuring that India makes the most of these opportunities and maintains its lead,'' it said.

NASSCOM said it undertook several initiatives during the year, including visits to potential countries and signing of MoU to strengthen the IT sector in India. Notable among them were visits to Australia, the Philippines, Japan, Taiwan and China and signing of an agreement with CBI (Dutch Centre for the Promotion of Imports from Developing Countries) on supporting offshore outsourcing to India.

Some milestones achieved included National Skills Registry, launched in January, and till date 30 companies accounting for 30 per cent of the industry's total workforce have registered, apart from 25,000 employees.

NASSCOM said its Self Regulatory Organisation was in the final rollout stage. The Indian IT Act amendments have received Cabinet approval and have been tabled in Parliament.

UNI