Indian firms engaged in business process outsourcing (BPO) in the health care sector are facing stiff competition from their US and Filipino counterparts, noted an Assocham-EY joint study.
“The Philippines and other low-cost locations are emerging as a big challenge to Indian BPO industry including the health care vertical.
“Competition from leading health care BPO companies in the US is a big challenge for Indian vendors, since most of them are specialists in the health care sector and provide an increased gamut of services as compared to Indian vendors,” highlighted the study.
Outlining the various growth inhibitors in health care BPO market in India, the study pointed out that data privacy is the most critical challenge in outsourcing health care processes since personal health care information is as private as financial information.
Hence, to provide outsourcing services to overseas vendors, the Indian vendors need to comply with international standards of security and privacy, since this can result in business being attracted or lost, it said.
Rising salary levels, inflationary pressure on overall cost of infrastructure, fluctuating exchange rates and infrastructural challenges such as power, broadband connectivity are other challenges that the Indian BPO industry is faced with, according to the Assocham-EY study.
Indian IT-BPO companies face strict and complex tax regime due to controversies on characterisation of income and transfer pricing issues relating to provision of research and development services, according to the study.
Besides, India has strict regulations for granting additional patents on previously patented molecules.
Inadequate research and development (R&D) incentives to contract research organisations also impact the R&D outsourcing in India, it said.
Changing regulatory mechanism and the time taken for approval of clinical trials in India has resulted in pharma companies running clinical trials in other countries, the study noted.
While the government is gradually taking steps to provide more clarity on these laws, the current scenario is adversely impacting the health care BPO market in India, noted the study.
