The global economic crisis seems to have not put too much of a dent on the BPM industry in India which in fact has growth significantly in the past financial year.
Milind Deora, Minister of State, Communications and IT, informed the parliament that BPO exports have increased to $17.8 billion in the financial year 2013. He stated that the BPO exports saw a growth from $12.4 billion in 2010 to $7.8 billion currently.
Growth statistics of BPO in India
Deora also mentions that Nasscom (National Association of Software and Services Companies) has revealed that the BPO industry in Philippines particularly the voice-based segment, has been rising significantly, but India continues to reign at the top holding a 37 percent share of the global BPO market.
The market share of the BPM industry in India saw a rise from 34% in 2009 to 37% in 2012. The growth of the global market was from $36-38 billion in the year 2009 and reached $48-50 billion in the year 2012.
The BPO industry in India has provided employment to around 917,000 people and the size of the industry saw a growth to $20.9 billion during 2012-13 from $14.7 billion during 2009-10.
Promoting BPM industry in India
However, other BPM destinations are slowly gaining a strong foothold in the global market. About 10 percent of the global market share of the Indian BPM industry was lost to Philippines, Brazil and China over the last five years.
The Economic Survey 2012-13, which was tabled in the parliament before the budget in February, revealed this fact and called for information campaigns to promote outsourcing to India.
Tax Incentives for BPO in India
Several incentives have been provided by the government at present in order to increase the export revenue obtained from IT-ITES/BPO industry. Several tax exemptions are available for these units under STP (Software Technology Parks) scheme.
The tax benefits are central sales tax reimbursement, exemption of customs duty on imported goods as well as exemption on excise duty on those goods which are indigenously manufactured.
In addition, assistance for the export activities of medium and small enterprises is also provided through MDA (marketing development assistance) and MAI (market access initiatives) of Department of Commerce.
The department has also notified 235 SEZs which are specific for IT-ITES. These units can avail tax benefits for 15 years according to Income Tax Act Section 10AA. These measures are intended to help India tide over the rising competition seen from other countries in the global BPM industry.