Indian domestic BPO crosses $1 billion mark – Gartner

While the world is focused on the global Outsourcing market (in which India has a 60% share,) the domestic market in India has jumped by a whopping 29% in one year, research firm Gartner said.

It further predicts the market will jump another 23% to hit #1.4 billion (Rs 6,400 crore) by the end of this year and $2.5 billion by end of 2014.

The predictions are one of the most aggressive by Gartner for any of the industries it tracks for any market in the World.

Interestingly, none of the big Indian firms, such as Infosys, TCS and Wipro, have started getting even double digit shares (10% or more) from India.

Having started with a US focus, most companies are reluctant to reduce prices for the Indian market, though the global recession has forced firms like Wipro and HCL to take India more seriously.

“Changing demographics, increasing affluence and economic growth in Asia/Pacific continues to drive shared services and BPO adoption, especially in Australia, India, Southeast Asia and China,” said T.J. Singh, research director at Gartner.

In a sign of the times, Gartner and IDC, the two leading IT market analysis firms in the World, have established a strong local presence in India over the last year or two.

Over the past three years, many established India-based BPO service providers and U.S.- and Europe-based multinational BPO services providers have started focusing on the Indian domestic market, Gartner pointed out.

In the past, these providers were focused primarily on the international or offshore market. Some of the local providers include Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.

“This phenomenon has been accentuated by the advent of the global slowdown in the U.S. and Western Europe, in which service providers who were focusing solely on the international market realized that there is merit in the Indian BPO market, given the fact that it grew rapidly even during the global economic crisis. The large and midsize players have now stepped up their activities,” Singh added.