Mega outsourcing deals worth $1 billion likely to return to India

Here is some good news for the IT service providers in India. According to experts in the outsourcing industry and the Indian government officials several big outsourcing deals to the tune of approximately $1 billion appear to return to India this year. This assessment is made from the fact that several clients from different sectors, such as telecom, retail, banking and utilities as well as several government agencies are looking forward to manage transformed requirements for the services offered by the Indian IT industry as well as their relatively lower operational costs.

What is more encouraging news for the Indian IT service providers is the fact that even a number of auto clients are eager to give them big contracts to administer their business and the IT systems during the FY 2010. In fact, earlier this year, the British Petroleum awarded a mega contract worth $1.5 billion to Indian IT service providers like Infosys, TCS and Wipro.

According to the country head of Everest Group, a global consultancy agency, Gaurav Gupta, a number of similar projects from the power sector in India are also in the line. Gupta said that though the US government and some others in the West actually comprise a large piece of the mega contracts, the Indian IT service providers are not tough competitors and hence, they usually handle contracts in the assortment of $50 million to $100 million. Nevertheless, he pointed out that recently a number of Indian IT service providers are contending for some mega deals and many of them are in the pipeline.

In the meantime, the share of total contracts offered by the United States has witnessed a gradual decline during the last five years. On the contrary, Europe has emerged to be a major gainer, as a number of European nations including the United Kingdom, France, Switzerland and the Netherlands have grown. According to industry experts, the revival of super contracts is likely to make more jobs available in this sector. The managing director of TPI, an international outsourcing consultancy firm, Sid Pai asserted that the number of mega deals in the pipeline has gone up significantly and the year 2010 appears to be a good one compared to 2009.

According to the most recent TPI index, outsourcing contracts worth approximately $25 billion were offered during the last quarter of 2009 indicating an increase of 47 per cent from the third quarter. The index further shows that the three major verticals – financial services, telecom and manufacturing, witnessed 33 per cent, 24 per cent and 76 per cent growth respectively during the later half of 2009.