Solid Infrastructure Key for India’s BPO Push

With global majors like Dell Inc committed towards respecting India’s talent when it comes to BPO operations and as the first wave of Business Process Outsourcing players who came in primarily for low cost and high quality settles in. The second wave would call for rapid ramping up of operations and a solid infrastructure is likely to propel India to move up a further notch up on the BPO value chain.

India’s willingness and ability in facilitating infrastructure related issues – will play a vital role in attracting foreign investment in this arena. Even though the government has done a commendable job in attracting investment so far. It needs to do even better as the standards have gone up and now foreign companies are looking up to have world class infrastructure over here.

Bullish on the outsourcing phenomenon – already the vibrant BPO players like 24/7 Customer, EXL Services, Convergys and Wipro Spectramind are increasing their number of recruits aggressively.

Initially BPO units were sitting happy because of the cost factor but now a lot of them are looking for rapid ramp-ups and it needs a lot of available office space to actually meet the scaling up requirements.

So at a time like this it is the responsibility of the government to make sure that the industry has good quality space ready for the BPO players. This is very important as non-availability of space would push them away to some other favorable location like Phillipines or Thailand.

Government also needs to look into areas like stamp duty rates. On an average different countries like Philippines, Ireland or Australia are asking for 1.5 per cent to 3 per cent stamp duty, while Indian rates are much higher. So the government should work towards reducing it to a nominal level.

According to industry estimates over 100 million sq ft of land will be engaged in BPO activity within India by the end of 2008. Steel and cement worth over Rs 28 billion will be needed to build infrastructure to encompass this land and it is likely to generate employment for over 0.5 million people in the country. So developing country infrastructure is quite an essential block of the BPO pie we need to work together to achieve better results.

Key BPO places in the region include – Hitech City within Hyderabad, ITPL at Bangalore, IT parks in Pune, New Delhi (national capital region) and Quark City in a small place called Mohali (Dell has just opened its third call center here).