5/31/2007

EPO to keep the Indian BPO story rolling

NEW DELHI: India's engineering process outsourcing (EPO) business would grow 10-fold over the next seven years to touch $30 billion and make the country a major hub in this area, says a study released on Friday.
"The estimated demand for engineering process outsourcing to India has grown at 30-35 per cent since 2004-06," said the study released here by Commerce Minister Kamal Nath, adding the momentum would be sustained in the ensuing years.

The global EPO market, on the other hand, will grow to around $110-$140 billion by 2015, taking India's share to 20-27 percent, said the study conducted by the state-run Engineering Export Promotion Council (EEPC).

According to EEPC chairman Rakesh Shah, engineering exports from India touched $26 billion in 2006-07 but expressed concern over the decision to do away with the duty entitlement passbook scheme, an export incentive programme, next year.

But Kamal Nath assured that the government was working to develop an alternative duty neutralisation scheme that would replace the current scheme to be in tune with the norms set by the World Trade Organisation.

The minister asked the engineering exporters to use the focus market scheme to their advantage in promoting exports to the identified markets, especially to the Commonwealth of Independent States (CIS).

As many as 16 new destinations, including CIS, had been included this year in the focus market list and exporters will find it useful to concentrate on developing the markets in these countries, Kamal Nath added.

"Indian exports including engineering exports are likely to face increased non-tariff barriers, considering that average tariffs for industrial products in all countries is headed southwards," he warned.

"This process has already begun for engineering products and is likely to gain greater momentum as India's share in the world exports increases in the coming years."

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