The Rapid Growth of BPO Industry in India

Know more about the expanding BPO industry in India, how it succeeded in South Asia, and what the future holds for India-based outsourcing companies.

Published on September 28, 2022
Last Updated on November 22, 2022

The business process outsourcing (BPO) industry in India has never been this large, prominent, and successful since it arrived more than four decades ago. Multinational companies continue to opt for call center outsourcing when it comes to their various business functions to BPO companies in India, thanks to the South Asian country’s expansive and growing pool of English-speaking information technology (IT) professionals and investor-friendly tax structure, among other factors. In other words, the BPO industry in India shows no signs of slowing down.

And yet, even after experiencing exponential development in the past decades, India business process outsourcing is still set to acquire additional gains in the near future. Experts predict that the increasing global need for IT services will fuel the growth of BPO industry in India for the next three years and beyond.1 

But what makes India the leading figure in today’s expanding BPO world? What kind of expansion will the country’s industry experience soon? 

BPO Defined 

What is BPO? As its name suggests, business process outsourcing is when businesses delegate their in-house digital processes, such as front-office customer experience services and back-office support operations, to third-party providers. 

Businesses outsource services to BPO companies to reduce operational expenses incurred by leases, wages, utilities, and other assets and services. Deals with a BPO service provider reallocate or divert money, staffing, and resources of a business towards improving their core competencies, innovating their processes, or expanding their services, among others.

The now booming BPO industry in India emerged at the tail end of the 20th century when the country oversaw the first application of outsourcing—an already existing concept used to purchase materials and manual labor—on emerging digital services. One of the world’s first call center outsourcing operations facilities was launched in India: a New Delhi office handling Japanese and Asia-Pacific transaction processing for a multinational credit card company.3

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Why the World Prefers India Business Process Outsourcing

The BPO service industry is doing exceptionally well in India because the South Asian country was one of the first movers in the industry. India has gained a lot of time to improve its modernized outsourcing concept, learning from contractual, staffing, and other outsourcing issues.2 Such an advantage provided them with the knowledge to stay ahead of other emerging BPO countries like China and the Philippines.

Aside from outsourcing expertise, the South Asian country also holds more advantages that convince local and overseas businesses to choose an Indian BPO service provider over competitors, countries, and geos. Some of these advantages include:

  • Highly Skilled Workforce
    India produces one of the most engineering and IT graduates, holders of master of business administration degrees, and doctor of philosophy degrees out of all call center outsourcing-focused countries in the world. India is capable of providing technical staffing to address the increasing need for software testing, application development, and other high-level IT services.1 
  • Lower Operating Costs
    The BPO sector in India benefits from the support of the Indian government, given the industry’s significant contribution to the country’s gross domestic product.2  Outsourcing companies benefit from various tax advantages and friendly government policies that reduce operating expenses considerably. 1 2 4
  • A Large Amount of English-speaking Manpower
    The BPO industry in India  has access to the world’s second-largest English-speaking population at more than 125 million people or just above 10 percent of the country’s entire population. 5 In 2021, India ranked sixth in English proficiency among adults out of 24 Asian countries polled in a proficiency index.6

These factors contributed to its recent growth. By 2021, Indian companies were already responsible for 56 percent of the global business process outsourcing workload, with nearly three-fifths of revenue collected from call center outsourcing and the remaining from data entry and other IT-related services.7 During the same period, India business process outsourcing was selected by U.S.-based companies as their preferred source of BPO services.7

The Promising Growth of BPO Sector in India

Market analysts predict the stellar financial numbers of the India business process outsourcing industry to continue rising in the coming years. The post-pandemic value of the growth in India is expected to reach $8.8 billion by 2025 at a compound annual growth rate (CAGR) of 5.8 percent, owing to simplified work-from-home requirements and other recently liberalized guidelines.8 

In the near future, it is expected to receive increased volume and demand for old digital services and emerging work such as software-as-a-service (SaaS) and network security in support of growing technology-focused businesses and expanding data usage across the world.1 More BPO employment opportunities are also set to appear and drive BPO growth in India to address the rising need for IT and digital services.1 

Experts also foresee India business process outsourcing service providers successfully warding off stiff competition from the Philippines. An innovative IT sector, a technical workforce, and various cost advantages are key in keeping its growth ahead despite the Philippines’ edge in being exceptionally fluent in English and being closely familiar with U.S. business processes.1 In addition, several Indian companies expanding into the Philippines and hiring Filipinos can be seen as a possible method of combining the expertise of the two BPO industry leaders while avoiding direct competition between each other. 2

Ridiculously Good Outsourcing

We at TaskUs recognize the potential of the BPO sector in India for growing our customer experience and next-generation digital services. For this reason, TaskUs entered the country in 2019 and made significant investments into expanding BPO in Indore and opening two more offices in Gurugram and Mohali within just three years. Soon, another site in Navi Mumbai will be added to the growing number of TaskUs locations in the country. By rapidly expanding our footprint, we also introduced our people-first culture, benefits, and facilities aimed at keeping our teammates happy and productive, enabling Us to deliver Ridiculously Good outsourcing services to the most disruptive brands across the globe.

We combine the capabilities of India’s brightest talent and the benefits of our innovative technologies to help businesses of any scale—from startups to tech giants—and industry. Together with our agility and cutting-edge ideas, it positions Us as an outsourcing leader, contributing to the country’s growing outsourcing industry.

Want to know more about outsourcing in India?

References

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Glenn Chua
Editorial Director
Glenn is the Editorial Director of the Integrated Marketing team who is in charge of all the client-, internal-, and external-facing content of the company with the goal of generating sales and growth for the company, as well as attracting new talent to join its global growth. Creative, passionate, yet soft-spoken in person, he has extensive knowledge of fast-growing companies, industries, service lines, and emerging technologies.