IT & BPM

The IT-BPM industry’s (excluding e-commerce) total revenue stood at $194 bn in 2020-21. The export revenue from this industry (excluding e-commerce) has been estimated at close to US$ 150 billion in 2020-21. In terms of FDI inflow, the computer software and hardware sectors attract the second highest FDI. Between April 2000 and September 2021, it attracted over US$ 78 billion. India is one of the most preferred destinations when it comes to setting up Global Capability Centres (GCCs). At present, more than 1,400 GCCs have more than 2,300 GCC units in India, employing more than 1.38 million professionals. Investment in Software-as-a-Service has increased 170% over 2020 and is expected to reach $4.5 billion in 2021, accounting for 8% of the overall private equity and venture capital deal value in India.

As per Central Board of Direct Taxes (CBDT) notification No. 890E dated 26 September 2000, the list of eligible IT enabled services under BPO operations considered in IBPS are as under:
i) Back office operations.
ii) Call centres.
iii) Content Development or Animation.
iv) Data Processing.
vi) Geographic information System Services.
vii) Human Resource Services.
viii) Insurance Claim processing.
ix) Legal Databases.
x) Medical Transcription.
xi) Payroll.
xii) Remote Maintenance.
xiii) Revenue Accounting.
xiv) Support Centres.
xv) Website services.

As per NASSCOM, BPO includes following processes that may be IT-enabled, do not necessitate on-shore presence and are hence, offshore-able:
1) Customer Interaction & Support (CIS)- CIS includes all forms of IT-enabled customer contact, inbound or outbound, voice or non-voice based support used to provide customer services, sales and marketing, technical support and help desk services.
2) Finance & Accounting (F&A)- F&A includes activities such as general accounting, transaction management (account receivables and payables management), corporate finance (e.g. treasury and risk management, and tax management); compliance management and statutory reporting, etc.
3) Horizontal-specific BPM services- Services that are reasonably similar across industries. Horizontal BPM services include Customer Interaction and Support (CIS), Finance and Accounting (F&A) and other related processing services, Knowledge Services, Human Resource Management (HRM), Procurement BPM, etc.
4) Human Resources Processing- HR processing services includes services that support the core HR activities plus talent management activities and associated business processes such as benefits, payroll and talent management.

The two major export promotion schemes launched under the Ministry of Electronics and Information Technology are:
 

1) Software Technology Parks (STPs): STP of India was set up as an autonomous body in 1991.
 Some of the benefits offered are:
 a) Customs duty exemption
 b) Accelerated depreciation
 c) 100% FDI permitted through automatic route.

 2) Special Economic Zone (SEZ): They were set up with an objective of providing an international competitiveness. Some of the benefits are:
 a) 100% income tax exemption on export income
 b) Duty free import. Please note that SEZ are for multiple sectors and these benefits extend to sectors other than IT BPM 

For more information, click here.

An entrepreneur can form a Consortium with a Company registered anywhere under Companies Act 1956/2013 which is able to fulfil the other eligibility criteria(s). The eligible Indian Company must have at least 26 % equity shareholder in the Consortium and commit to maintain minimum equity shareholding (26%) for at least three years.