Back office operations are expected to be most at risk from the development of artificial intelligence (AI), which could be used to automate everything from call centres to audit.

India’s main office markets are dependent on business process outsourcing (BPO) and information technology and IT services operations, via both outsourcing companies and the ‘insourced’ operations of global technology firms.

However, Arvind Nandan, head of research & consulting at Savills India, says the BPO and IT/ITES market in India is “not merely based on cost-arbitrage. Instead, services such as automation and procurement are the key, and these services continue to thrive.”

India’s National Association of Software and Solutions Companies latest CEO Survey found 87% of respondents believed tech spending would increase over the next year. The nation’s tech firms are keen to harness AI but viewed a shortage of staff with the right skills and the risk of protectionist actions against India as more significant dangers.

Nandan says: “Political decision-making processes across the globe could impact revenues to some extent. Shifting bases of financial services firms or banks may also be critical to Indian BPO industry, which relies significantly on global financial and banking sector clients.”

The Indian government is also keen to give the industry the tools it needs to adapt and grow, says Nandan. “Policy support has been available for the industry in India. For example, in the interim budget of February 2019, the government announced plans to launch a national program for AI and a National AI portal.”

As a result, despite signs of economic slowdown in the country, the BPO industry is estimated to continue growing at between 4.5% to 5% pa, which will be welcomed by the nation’s office landlords.

Further reading:
Savills India

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Arvind Nandan