Welcome to Netherland

IT Enabled Services (ITES) Sector

IT Enabled Services (ITES) has been the key driver of growth for the Indian IT industry. IT software and services in India accounted for 2.4% of the country’s GDP and 20.4% of exports in 2002-2003. This share is projected to increase to 7% of India’s GDP and 35 per cent of total exports by 2008.

India offers a distinct set of advantages, which make it a preferred destination for ITES:
	more than a decade of experience in this area
	fluency in the English language
	lower real estate costs and administrative expenses in comparison with developed countries
	large and rapidly growing pool of qualified IT-enabled services providers, who collectively cover a wide range of services, with different levels of complexity and value addition.
	lower manpower costs (30-40% of equivalent costs in the US and UK)
	Advantage of time zone differences and availability of 24x7 services
	supportive government policy infrastructure
	locating ITES.
	high quality offerings

Global corporations are generating overall cost savings in the range of 40-60 per cent, depending on the process offshored to India.

Policy Framework The Government of India recognises ITES as a major thrust area. Some of the key incentives to the industry are:
	100 % Foreign Direct Investment (FDI) permitted in call centres
	Sharing of bandwidth for disaster recovery and mission critical applications between multiple entities
	Call centre approval is not required to be customer-based but specific to a place of presence (PoP), or by installed capacity at the place of termination. This not only assists in reducing the lead-time for implementation of programmes for new customers but also adds to the savings in costs and time that can be channelised for more productive usage
	Approved Internet and IPLC connectivity on the same LAN
	Allowed connectivity of a LAN in an international call centre to a domestic ISP. This enables a call center operator to choose his service provider. Competition is expected to drive down prices while offering a higher service-reliability value proposition
	Duty-free imports of capital goods permitted for BPO companies (under the Export Promotion of Capital Goods scheme)
	The Government of India has allowed total income tax exemption on export of IT enabled outsourcing services (Sections 10A/10B of the Income Tax Act). These cover a wide range of services such as customer interaction services, BPO/Back office operations, medical transcription, legal databases, digital content development, engineering and design services, support centres, payroll/HR services, web-site services, data digitisation/GIS and online education

In addition to the central government, some of the state governments, such as Andhra Pradesh, Karnataka, West Bengal and Tamil Nadu, have also introduced substantial incentives to boost the ITES-BPO sector in their respective states.

According to NASSCOM, the apex sector body in India, the IT enabled services also witnessed explosive growth in the last two years, keeping in line with the performance of the software sector. ITES exports are likely to touch US$ 21-24 billion by 2008. The ITES-BPO sector has steadily increased its share in the total revenue of India’s IT software and services industry from 6.5 per cent in 1998-99 to an estimated 29 per cent in 2003-04.

Business Process Outsourcing (BPO) » Knowledge Process Outsourcing (KPO)

Designed & Developed by Icreon

ICREON