India and other lowcost labour markets could see growth in outsourcing services slowing down in 2008 due to the looming global recession, a global strategic advisory firm has said. The multinational Hackett Group found that there was still significant longterm opportunity for continued business growth in India, as companies in North America, Europe and industrialised Asian markets struggle to reduce costs and drive higher effectiveness.

This they do by primarily outsourcing various areas of business to Indian and other lowcost labour markets.

But in response to the threat of an economic downturn, many companies are hitting the pause switch on their globalisation efforts, said Hacketts globalisation and outsourcing practice leader Julio Ramirez.

The Indian IT / ITES, BPO & Software companies in India argues that Indian Government must extend the STPI scheme as the Indian IT and BPO companies compete with the Chinese and Philippine companies, enjoying a 10-year tax holidays. Thus, the future of profitability of Software Development, India companies depends on the extension of tax holiday.