56% of the BPO market could be in India’s lap by 2006

Indian BPO market could be playing with some very big bucks by the year 2006. As much as 56% of the BPO pie could be had by India with the demand for BPO services increasing at an annual growth rate of 50 per cent during 2004-06, according to a report by ICRA.

However, if there is a constant backlash regarding BPO in the U.S. market, that could pose a problem. And that will decide how much share of the gigantic BPO market will come India’s way. If the backlash stays on for sometime, then may be India could only have a 42% share of the market instead of 56%.

The pace at which the Indian BPO market is increasing is tremendous. The market of BPO in India is likely to be around $9-12 billion by 2006 and will be employing around 0.4 million people. The BPO market is ready to shoot up and India is looking to go as far as it can.

Indicating a consolidation trend within the industry, the report points out that even though there are a large number of BPO players in the Indian market at around 400, the percentage of third party vendors to total BPO players have declined from 57.4 per cent in 2001 fiscal to 42.2 per cent in 2003 fiscal while that of captive players have increased from 42.6 per cent to 57.8 per cent during the same period.

There is some great news ahead for the Indian BPO market. If only the U.S. BPO backlash doesn’t spoil the party for the BPO market In India, Indian BPO could well be on its way to becoming the BPO super power of the world.