Hindi-Chini bhai bhai! Will this be the BPO mantra for 2010? With global firms looking at an India plus China approach for offshoring , it does seem so. Many global firms wanting to outsource will adopt an India China model. While India will be the hotspot for call centres, software development and high-end processes like Teleradiology, medical animation. China will be the source of cheap PCs, motherboards and other items from the manufacturing domain . And guess who'll gain when it comes to setting BPOs in China? It is going to be India. Says Partha Iyengar, a Gartner group BPO specialist: "Companies that want a base in China are either asking their Indian providers to establish this base for them, such as General Electric Corp., or else setting up captive centres in China, in addition to either captive or outsourced centres in India." But will China beat India by 2010? It may. And it's a wake-up call for the Indian government.

If you're interested in setting up a BPO in China, the Chinese will take care of your business needs. Whether it's land requirement or construction of a building. Everything is under single window processing. No red-tape, here. Even if China can't beat India, the dragon may snatch a big piece of the global BPO pie from the tiger's mouth. India's BPO exports in 2003 were close to $3.1 billion. China's was only a fraction of it - $210 million. But China's outsourcing market grew at 34.2 per cent, higher than the Asia-Pacific region. Be it better telecom infrastructure, roads or government support, China gains over India. But the deregulation of Indian telecom market has surely made it globally competitive. In the IT domain too, India is far ahead of China with close to $10 billion in exports. China's IT exports in 2003 stood at $700 million. But China's fast catching up. It can produce anything at a lower cost by scaling up operations. It has perfected manufacturing processes over the years. English - The 'Achilles heel' of China – Years of communist isolation hasn't helped China and communication is an area which has become the Achilles heel for China.

But, the government seems to have realized it and is working towards it. The Chinese government has invested more than $5.4 billion in English education at Universities. China is imparting IT education in a big way. And no prizes for guessing who is helping. It's India, of course. Although NIIT has set up over 100 centres all over China, the courseware is in Mandarin. Says Mr. Suren Singh Rasaily, head Planetworkz, NIIT: "China has every capability to be a global BPO giant. But lack of English language skills is the biggest obstacle. English is needed, whether you are working in a contact centre or making software." Mr. Rasaily has been instrumental in setting up training centres across China. 2008 Olympics: A boon for China Massive preparation to integrate with the West are being carried out for the 2008 Beijing Olympics.

People are being trained in English. The Olympics will significantly enhance this proficiency and also expose China to MNCs, willing to outsource. Time / Distance advantage Despite the fact that China's map spans five time zones, all of China operates on a single time zone. Moreover, time overlap also helps China and India. The time difference is a big advantage. For e.g.: An accountant in the US submits his rough tax worksheets at the end of his day. He just sleeps over it. And gets detailed calculated figures in the morning. The agents in India and China work overnight. The time difference between Washington and Beijing / New Delhi exceeds ten hours. Cost Advantage - who wins India or China?? Obviously, China, since labour rates are very low. (Think of an Indian worker 10 years back.) Typical IT salaries range from $5500 to $9000 per year for a programmer with 2-3 years experience. Compared to other outsourcing destinations, China has the lowest real estate and power costs. The average salary of an Indian programmer stands at $6000 to $12,000. But, it's much lower in China at $5700 to $9000. Labour pool China has over 200,000 IT professionals and 50,000 new graduates are added to the pool every year.

Although, universities provide a source for excellent technical talent, many migrate to western pastures. Language and cultural compatibility present barriers to successful engagements. India leads the world in this area. Over 2,100,000 English-speaking graduates are added annually and 460,000 of them are IT grads. The number of IT (including ITES-BPO) professionals employed in India has grown from 284,000 in 1999-2000 to 813,000 in 2003-04. Out of this, as of 2003-04, 245,000 professionals are employed in the ITES-BPO sector. Indian ITES-BPO exports registered a growth of 44 % in FY 2003-04 clocking revenues of US$ 3.6 billion. 'Legal framework - China is bad' Says Mark Kobayashi Hillary, author of Outsourcing to India: The Offshore Advantage: "Being a democracy certainly helps. India has a proper IPR and regulatory framework in place. It's unlike China where only 5% of music is sold in shops and the rest is pirated." The BPO hotspots China: Beijing, Chengdu, Dalian, Guangzhou, Hong Kong and Shanghai are the major outsourcing destinations. Beijing, Shanghai and Guangzhon account for 80% of the market. Gurgaon, Bangalore, Pune, Noida, New Delhi, Mumbai and Chennai are the major BPO hotspots of India. But when it comes to comparing Shanghai with Mumbai, dragon rules the roost. The future of BPO India, Inc. India certainly leads with more than 70 per cent of the global BPO market. And the future looks certainly bright. But unless the Indian government takes some specific steps to improve infrastructure, the share may diminish.

There's a lack of quality staff. And the demand is huge. There is a dearth of good English speaking people. And policies of state governments in West Bengal, Kerala and Maharashtra have certainly hurt. The states' policy to ban English at the primary school level has been an obstacle. The governments have woken up to this fact. And the response is encouraging. India needs to give more tax rebates to entrepreneurs in the BPO sector. Proper framework for BPO laws needs to be adopted. More bodies like Nasscom especially for the BPO domain are needed. Philippines has two associations especially for call centres. The future looks certainly bright for the Indian BPO industry. But it may not remain so if the government doesn't wake up to the danger.