IT-ITES sectors include companies from software development, consultancies, BPO (business process outsource), software management and

online services. Recently NASSCOM reported that IT and ITES sector in India, annually grows at the rate of about 25% and sustains nearly 2 million jobs. Indian IT - ITES sector is its flagship economy builder and every single rupee spent by IT-ITES sector accounts for two rupees in Indian economy. However this sector faces several issues. The skill level of the information technology professionals is one area that needs improvement and presents a considerable amount of challenge before the Indian information technology industry. The Indian information technology industry also needs to co-ordinate with the academic circles as well as other industries in India for better performance and improved productivity. The experts are of the opinion that the business process outsourcing service providers in India need to change their operations to a way that is more oriented to the knowledge process outsourcing. One of the most important crises facing the Indian information technology industry concerns the human resources aspect. Other issues include High attrition rates. With attrition rates ranging between 25-40 per cent in the ITes-BPO industry, it is posing a big challenge Appreciation of the Rupee is also an issue. As of mid Oct 07, the Rupee-US Dollar exchange rate was 12.3 per cent higher yo-y, denting the earnings of the ITeS-BPO industry in India. This might provide an opportunity for other emerging countries like China and Philippines to gain shares in the global market. The continuous rupee appreciation would impact ITeS-BPO industry earnings. It is estimated that every one per cent rupee appreciation against the US Dollar hits the ITeS-BPO companies operating margins by 20-30 basis points (bps). There are other people issues like transnational identities where there are challenges facing union corporations across multinationals, customer abuse to employees due to poor service and stringent work place controls to name a few.