I. Problems
A. Macro- The major macro problems are surrounding the loss of the tax abatement in India as well as the weakening US dollar. Both of these issues make it incredibly expensive to do business in India compared to other locations like the Philippines.

B. Micro- In India the transportation and infrastructure costs continue to hurt the bottom line.

II. Causes- Tax abatement ended in 2009, transportation and infrastructure costs are not going away and other countries have more attractive incentives to bring in higher margins.

III. Systems affected- The whole upswing in bringing BPOs into India has been affected, it is no longer that attractive to bring your business into India when you can make much more money in the Phillipines with the same customer satisfaction.

IV. Alternatives- If India wants to keep BPO’s around, they need to start flirting with the idea of re-instating the tax abatement as well as having the government pick up the transportation costs.

V. Recommendations- If I am the decision maker in the Indian government, I do not want the BPO’s to pick up and move all their money to another country. So, I am implementing a lower tax bracket for these companies to remain in India, I am picking up the costs of transportation as incentives to stay in India. It always comes down to money and profitability for businesses, so I would keep India competitive to keep the Citibank’s and Intel’s here.

Questions
1) How has the global economic downturn, discussed in the opening profile and throughout this chapter, impacted jobs outsourcing in the BPO industry?

The economic downturn has helped India’s BPO industry, “world trade continues to grow, it has grown by 133 percent in the last 15 years” (Deresky, 2011). It has helped companies move operations overseas where they are able to capitalize on lower wages and taxes, which in