KPMG in its IT Advisory report, ‘Exploring Global Frontier - the new emerging destinations’ said, “Cities such as Budapest, Prague, Bucharest have established a solid reputation as BPO locations. These cities offer attractive conditions, especially for companies looking for a good base of experience and proof of concept at costs below Western European levels.”

The IT outsourcing market in countries like Romania, Poland, Bulgaria, is in the range of $250-450 million, which allows the Indian BPO companies to have smaller centres with certain niche skills.

Unlike the US, Europe has been relatively cautious towards offshoring and outsourcing primarily due to cultural and legal factors. Industry observers say that the economic recession has forced many companies to look towards IT outsourcing and offshoring.

However, it is unlikely that there will be any strong trend from Indian BPOs in having a centre in Eastern Europe as this will depend largely on the deal wins in the region. Nikhil Rajpal, principal, Everest Group, said, “We do not think companies will proactively move into the region and there will be more of a exploration into this.”