September 2005 pdf PDF Version

When the Wind Blows: An overview of Business Process Outsourcing (BPO) in India

By Focus on the Global South, India and Young Professionals Collective (YPC) Mumbai


…….when the wind blows, the cradle will rock;

when the bough breaks, the cradle will fall….(From the nursery rhyme)



The movement of call centre jobs from higher-wage to lower-wage countries such as India is the logical progression of what might be called manufacturing and agricultural “outsourcing” over previous decades, as capital continues its reorientation of the world economy in the search for higher profit margins wherever they may exist.


Business Process Outsourcing is becoming a controversial model and is being discussed both in counties of origin as well as those where the work is being outsourced. People are working themselves into a frenzy in the boardrooms of India and the West.  The counteroffensive to these moves by pressure groups of various hues and stripes continues under the derisive “protectionist” label.  Trade unions in the US and UK and many parts of Europe are still deciding if BPO is one of the main reasons for job losses in their countries, and it is true that this indeed is the perception among workers there. Trade unions in India have very little presence in outsourced services, but many see it as a sector that offers jobs, even if a mere drop in the ocean in an employment starved country. And the Indian BPO employees themselves appear somewhere in the story.


The more general term of Business Process Outsourcing (BPO) refers to the outsourcing of business functions such as airline and hotel reservations, data entry and processing tasks, and mortgage processing, some under the rubric of call centres.   This outsourcing primarily takes the form of a local Indian company or foreign subsidiary managing these business operations on behalf of companies in the U.S, U.K. and other Anglophone countries. While the BPO industry may provide employment to a small segment of India’s population, as an export-oriented industry with competition from other countries, it is unclear how long these relatively low-skilled jobs will stay in India.[1] The BPO industry in India, as an export-oriented sector contingent on demand from primarily rich Western countries, is part of a wider government encouragement of peripheral industries rather than core manufacturing, such as the export garment industry; or indeed the cultivation of agricultural cash crops especially such as cut roses and strawberries to replace growing of staple food and subsistence agriculture. It follows that this type of outsourcing industry, without accompanying investment in other long-term domestic industries, has its limitations.

This report will look at the BPO industry in India, investigating its effects on and place in the macro-economy, the debate around outsourcing waged in the US, UK and India, and the working conditions of call centre employees.

[1]The total workers in India’s IT industry, close to a million, only makes up one quarter of one percent of all workers in India.  See Chandrasekhar, C.P., “IT-services as locomotive”, Frontline, 1 July 2005, 120-121.