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India's BPO market to hit 25 percent growth in 2010

Business process outsourcing in India's domestic market forecast to yield potential upside, with growth reaching US$1.2 billion in 2011 and US$1.8 billion by 2013, says Gartner.

Business process outsourcing (BPO) providers have recognized the potential in India's domestic market and are shifting greater focus and investment to the country, said a Gartner analyst. The growth that is expected to come out of this will hit US$1.2 billion in 2011, and reach US$1.8 billion by 2013.

In a report released Monday, T.J. Singh, research director at Gartner, said India's BPO market grew in the last two years despite the economic slowdown, hitting 7.3 percent growth year-on-year in 2009. The report noted that the domestic BPO market is one of the country's high-growth services segment and has now become more organized. Overall, the market in India is expected to increase by 19 percent through 2013.

According to Singh, established Indian BPO providers and multinational corporation services providers, which previously focused primarily on the international offshore services market, have came to recognize India's domestic market potential. He added that large and midsize BPO players have stepped up their activities in the country.

Singh noted that in the short term, the impact of market trends such as changing demographics and affluence levels, consumption of value-based services, increased focus on service quality and the continued momentum of mergers and acquisitions will influence shifts in buyer needs and behavior.

According to the report, the BPO services market in Asia-Pacific and Japan consists of a mix of multinationals, regional and local BPO and IT services providers and telecom vendors.

In 2009, there was significant consolidation in the global and regional BPO market, said Gartner, adding that regional BPO deals had been impacted by these larger merger-and-acquisitions deals.

In August 2008, US-based PeopleSupport and India's Aegis merged to form Aegis PeopleSupport, a move that was "forced" by the recession, said an analyst.