Captive Center

In the contemporary world of ultra-modern lifestyle, the Indian captive market turns out to be a huge venture. Nowadays where the world is now going technologically advanced, this kind of business enterprise continuously expands at a rapid pace across boundaries, functions, and geographies. As a matter if fact, it is now increasingly becoming mainstream. Thus, the role of the captive is evolving.

The Eighties was actually the era when the origin of the Indian captive market really began. It was the time when various state-of-the-art companies set up captives so as to provide engineering services. But it was in the early-mid 1990s where people witnessed the beginning of captives being set up for BPO/transaction processing.

Actually the landmarks in this period were the captives set up by the American Express and The General Electric Company, or GE. Plus, various manufacturing companies adopt captives in this period as well so as to provide engineering services.

Moreover, in the late 1990s the growth of the captive market went sky-high. And it was driven mainly by BPO in the banking and financial-services industry, building on the proof of concept established by firms like American Express and GE Capital International Services or GECIS, General Electric’s BPO company. What’s more, leading global banks such as Citigroup, HSBC and Standard Chartered set up captives in this period too.

It was after year 2000 when captive adoption has spread and grown rapidly across multiple verticals like banking and financial services, manufacturing, telecom, hi-tech and software. Yet in the past few years, a number of captives set up to provide specialized knowledge intensive functions such as the Goldman Sachs and Lehmann Brothers that have set up captives for equity research and financial modeling.

If truth be told, there actually are two key factors that contribute growth in the Indian captive market:

Established captives expanding scale – Many of the established players like Dell, HSBC, and Motorola have made their scale and scope of operations bigger. This has resulted in significant headcount expansion (about 20%–25% increase in headcount expansion every year) and in opening up of new centers

Increase in captive adoption – There are new captive setups continue to increase as adoption spreads to new verticals and functional areas.