Is India still a BPO hotspot?

Labour cost advantage associated with offshoring information technology services to countries like  India, China and the Philippines is declining, according to a new report by global management consulting firm A T Kearney.

The total compensation costs for office services employees in India, China and the Philippines, rose as much as 40 per cent in 2006, compared to just 10 per cent in most developed countries.

Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- are now ranked among the top 20 offshoring
locations, the report said.

While total salary packages for IT programmers or call centre representatives rose by 5-10 per cent
in most developed countries, average wages for similar positions in India, China, the Philippines rose by 20-40 per cent.

Is India losing its cost advantage in BPO services? Will India lose out to other emerging economies due to rising salaries?

Is India still a hot BPO destination? How can India maintain its lead? Tell us your views.