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Recognizing the growing importance of the IT- enabled outsourcing sector, the Government of India has introduced various policy concessions and initiatives to accelerate the growth of the market. The Indian software and services industry, spearheaded by associations such as Nasscom has also taken various steps to ensure that India becomes the global hub for IT-enabled outsourcing in the future. Some of the steps take by the Government and industry for the ITES/BPO sectors are as follows:
In the month of May 2002, the Government of India has accepted Nasscom's recommendations and removed certain procedural bottlenecks that were hampering the growth of the Indian call centre industry. |
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Highlight of Telecom Recommendations |
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Allow sharing of bandwidth for disaster recovery and mission critical applications between multiple entities |
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Permit sharing of bandwidth between multiple locations of a single entity and also within the same group of companies |
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Call Centre approval should not to be customer-specific |
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Allow Internet & IPLC connectivity on same LAN |
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Allow connectivity of a LAN in an international call centre to a domestic ISP |
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ITES companies be allowed to set up their own gateways |
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The Government of India has allowed total income tax exemption on the export of IT initiative enabled outsourcing services under Sections 10A/10B of the Income Tax Act. They are: |
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Customer interaction Services |
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BPO/Back office operations |
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Medical Transcription |
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Legal databases |
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Digital Content development |
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Engineering & Design services |
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Support Centres |
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Payroll/ HR services |
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Web-site services |
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Data Digitization/ GIS and Online education |
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Foreign Direct Investment (FDI) for 100 percent of the equity has been permitted in BPO companies. |
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Duty-free imports of capital goods are permitted (under the Export Promotion of Capital Goods scheme) for BPO companies. |
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The Government has promoted several Software Technology Parks (STPs) which provide ready-to-plug IT and telecom infrastructure. STPs also allow single-window clearance for all regulatory compliance issues. Currently, STPs have been established in 20 locations across India covering most of the major towns/cities. |
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Various Indian states have introduced regulatory and infrastructure-related initiatives to encourage ITES investments within their territories. |
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