Resolution:
For Request Response Service(BW sends the request to adapter):
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In this case the parameter 'requestTimeout' can be configured in the Input tab of the InvokeRequestResponseServer activity in BW.

For Request Response Invocation Service(adapter sends the request to BW):
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When creating Adapter Service in Siebel Adapter (e.g. Request Response Invocation Service) the endpoint is created automatically.
The endpoint under the Sessions folder has the field 'InvocationTimeout' (ms), which is defaulted to zero, which means no timeout. This will cause the Siebel Adapter to wait indefinitely without timing out,when it does not receive a response from TIBCO BW Process.

However, the HTTPReplyTimeout set in the HTTP request sent to the adapter, overrides the values set at the adapter end point at the session level.