International research agency Gartner has predicted that India's overall share in the offshore business process offshoring market would slip from the present 80 per cent to 55 per cent by 2007.
Sujoy Chohan, vice-president and research director of Gartner's "Offshore BPO", said even though India would continue to be a dominant player, other countries would come up fast.
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"The skill set required for BPO services is available in abundance across many English-speaking countries and even basic non-language dependent work can be offered by countries whose native language is not English.
"This has thrown up a number of countries which can and are directly competing with India. These different countries together will erode India's competitive market share," Chohan said.
Gartner said the global offshore BPO market was likely to be around $ 27 billion by 2007. India's pie would rise from $2.3 billion to $14 billion during the same period but its overall share will fall.
Chohan pointed out that the Indian IT industry and government would have to work together so that there was abundance of people with English-speaking skills.
"The issue is being addressed by the private sector but needs greater government involvement. The ministry of education needs to step in and work closely with the industry to assess what needs to be done," he said adding that the most important element for offshore BPO industry was to ensure the continuous flow of trained workforce.
He said the situation was not alarmist and could be rectified if the government puts into pace a strategy and timeline to achieve certain growth and infrastructure targets to compete in the marketplace.
The good thing, however, is the industry has already begun to admit that government assistance is essential and required to tackle the immense infrastructure issue facing the industry. "The industry did not want to accept this just two years ago," he pointed out.
A number of countries such as China, South Africa, Philippines, Australia, New Zealand, Mauritius, Malaysia have woken up to the job creating potential of BPO business and trying to put together integrated strategies to develop BPO business.