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How the Indian BPO Incentive can save your business money

how the indian bpo incentive can save your business money

How the Indian BPO Incentive can save your business money

India has become synonymous with outsourcing and the business process outsourcing (BPO) industry. The Indian government is now trying to take it a step further by providing incentives to companies that express interest in setting up outsourcing operations through the India BPO Promotion Scheme (IBPS). The intention is to encourage BPO companies to setup operations in non-capital or non-metro cities across India. The government hopes this scheme will rejuvenate some of the minor cities and rural areas. A similar scheme is already in place for the Northeast region of India (NEBPS) however, it hasn’t gained much traction yet.

The Indian government has now sweetened the pot even more by providing further incentives for the employment of women and disabled individuals. Officials have claimed that businesses may receive a 5% top up incentive if women make up more than half of the company’s personnel. They may also apply a 2% top up for the hiring of disabled individuals. These incentives are in addition to the already established Rs 1 lakh (£1,000 approximately) subsidy per seat.        

The objective of the Indian government is justifiable as every day the cost of operating a BPO in metro areas is increasing. Minor cities also benefit since their native labour force gains valuable technical and vocational skills. In addition, the local economy also prospers with the setting up of the BPO and all the secondary industries that will follow in its wake. At the moment the government has set aside nearly Rs 500 crore (£51.5million approximately) for companies wanting to take advantage of the promotion scheme. An official who wanted to remain anonymous stated, "More incentives are being contemplated upon if the employment target is exceeded since the government wants to make the scheme performance oriented."

The introduction of these types of schemes is a step in the right direction for the Indian government.  Providing incentives for hiring women and disabled individuals demonstrates that progress is being made. BPOs are also situated in a unique position to lower operating costs while also being able to develop staff according to their particular parameters.

Having said that, interpreting the numerous laws and taking full advantage of the benefits can be a challenging task for companies that are entering the Indian market for the first time; with the right partner to advise/guide them, there is profit to be made. 

If you are interested in these schemes, or are considering business setup in India feel free to call us on 0845 838 2672 or email us on to discuss in further. 

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