Union IT Minister Ravi Shankar Prasad has announced further relaxation in the other service provider (OSP) license norms for the business process outsourcing firms in India and overseas.
“Further liberalization of Guidelines today will provide a big fillip for growth of OSP industry in India. This will create immense opportunities, income and employment in India,” Union IT and Telecom minister Ravi Shankar Prasad, told media persons announcing the reforms on June 23.
This was in addition to the relaxation the ministry announced in November 2020, enabling ease of business, and better access to talent.
What is an OSP?
OSPs are those companies that provides services such as tele-banking, tele-medicine, tele-trading, e-commerce, call-centre operations etc. OSPs are allowed to operate by using infrastructure provided by various access providers for non-telecom services.
Late last year the government did away with many of the provisions that made it tough for the firms to adopt work from home and work from anywhere amid the pandemic. These include large bank guarantees, frequent reporting obligations, and penal provisions. However, there were additional restrictions imposed on the international OSPs and third party data centres.
The recent announcements have addressed many of the concerns raised earlier.
As per the new OSP norms, there is distinction between domestic and international OSP.
This makes it easier for BPO firms to cater to clients globally. EPABX (Electronic Private Automatic Branch Exchange), a telephone network used by organisation for communication with clients overseas and a part of OSP, can be located anywhere in the world. This includes storing in a third party data centres in India, which wasn’t the case earlier. Penalties for violations were removed altogether reaffirming the trust Government has in business.
Currently the BPM industry revenues grew 2.4 percent to $38.5 billion in FY21 despite the pandemic. “This was largely possible due to the industry’s ability to work remotely and majorly enabled by the Government of India’s relaxations of WFH requirements under the OSP regime, first temporarily, in March 2020 and then complete reforms under the new guidelines in November 2020,” Prasad said.
With the new set of reforms, the industry has the potential to grow to $5.5 billion by 2025.
“With access to worldclass talent, the ability to work from anywhere, India will significantly strengthen its lead as a preferred hub for the BPM industry,” Debjani Ghosh, President, NASSCOM, said in a tweet.
Ashish Aggarwal, senior director and head, policy and advocacy, NASSCOM, explained to Moneycontrol, “The government has issued clarifications on all the points raised by us. In all the points, the clarifications are beneficial to the industry and this should put our industry in a competitive space, in the context of the telecom regulatory regime.”
While NASSCOM’s ask for using full set of services of third party hosting wasn't met, enabling EPABX data to be stored in the third party data centre will allow industry to focus on their core work, he added.
“Combined with the first set of OSP reforms in November 2020, this is a significant ease of doing business reform for the industry,” Aggarwal said.