Outsourcing to India

India could earn $60bn a year by 2010 from information technology and outsourcing, an industry report says. The report was prepared by Nasscom, a lobby firm for Indian software and service companies, and international consulting firm McKinsey and Company. It said business worth $110bn would be outsourced worldwide by 2010 and India is set to capture more than half of it. But the report said more investment was needed in developing skills and infrastructure to achieve the goals.

Most of the new business is expected to be outsourced by insurance, retail, banking and travel companies, the report said. India's IT and outsourcing sector is currently worth about $22bn and expected to grow by 25% until the end of the decade, it said. The forecast also predicted the sector could directly employ about 2.3m workers by 2010, compared to 700,000 now, but projected a shortfall of 500,000 skilled workers.

Indirect employment was also set to nearly treble to 6.5m in the next five years as software and customer services were outsourced to India, it said. The report urged the creation of at least 10 "knowledge cities" with their own airports, roads, office space and housing facilities to meet the needs of technology firms. The report predicted IT and outsourcing could more than double to 7% of India's GDP by 2010 and account for 44% of export growth.

Adapted from BBC Online, December 2005

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