Optimism on ASEAN India service & investments agreement; However, future of “Outsourcing?”

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India is known as a highly competitive country, where its high-tech sector, is well-known for “Business Process Outsourcing (BPO).” However, with ASEAN, BPO is also an important industry, particularly to the Philippines.

Yet as the attached article from The Hindu points out, Malaysia is optimistic that an ASEAN and India agreement on service and investments would be concluded by early next year.

What would likely occur to Philippines BPO sector, as ASEAN and India trade in service and investments is opened up? Would India take the opportunity to invest more into the Philippines BPO industry? And would the Philippines invest in India’s BPO industry?

Already, the Philippine BPO industry, have conquered the call-center market away from India, where the first calls taken in 1997, but 15 years later  it employs 638,000 people and boasts of revenues of $11 billion.

Apart from the usual cheap labour and Americans preferring  Filippinos because their  English accent is easy to understand when compared to the Indians, the Philippines government has  followed India’s lead and  has been encouraging the growth of the BPO industry by offering fiscal and non-fiscal incentives to attract more foreign investment, to the extent that Special Economic Zones were extended to include “buildings” in the city centers.

  • The following is from The Hindu

YDERABAD, DEC. 16:

The India-Asean agreement on services and investments is likely to be concluded by early next year paving the way for further co-operation, according to Mustapa Mohamed, Malaysian Minister for Trade and Industry.

“The talks are at an advanced stage including at Djakarta and we hope the agreement will be concluded early next year. In fact, it was expected to be reached last year,” he said.

The Association of South East Asia Nations hope this will open up opportunities and strengthen the earlier agreement signed on trade.

Speaking to newspersons, he hoped that the Malaysia India trade will top $15 billion (US) by 2015, up from $12.5 billion recorded during 2011. About 51 per cent of Malaysian exports comprise manufactured products such as electrical and electronic.

A high-powered Malaysian delegation is on India tour interacting with industries, State and Central Government representatives seeking to further strengthen the trade ties. Malaysia is keen to attract Indian small and medium-sized businesses to locate their bases and expand trade in the region.

He felt that India with a population of about 1.2 billion and ASEAN with 600 million, the opportunities abound.

The Trade Minister said that a Malaysian company has made big inroads into the mono-rail opportunity in India with its first project in Mumbai and two projects in Brazil. It is in talks with several major cities including Kolkata for setting up mono rail networks, he said.

Referring to infrastructure opportunity, he said Malaysia is engaged with development of about 1,000 km of road network in India and is keen to play a role in other infrastructure projects, housing sector and MRO facilities.

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