India IT Industry


The Indian information technology (IT) industry has played a major role in placing India on the international map. The industry is mainly governed by IT software and facilities for instance System Integration, Software experiments, Custom Application Development and Maintenance (CADM), network services and IT Solutions. According to Nasscom's findings Indian IT-BPO industry expanded by 12% during the Fiscal year 2009 and attained aggregate returns of US$ 71.6 billion. Out of the derived revenue US$ 59.6 billion was solely earned by the software and services division. Moreover, the industry witnessed an increase of around US$ 7 million in FY 2008-09 i.e. US$ 47.3 billion against US$ 40.9 billion accrued in FY 2008-09

IT Outsourcing in India

As per NASSCOM, IT exports in business process outsourcing (BPO) services attained revenues of US$ 48 billion in FY 2008-09 and accounted for more than 77% of the entire software and services income. Over the years India has been the most favorable outsourcing hub for firm on a lookout to offshore their IT operations. The factors behind India being a preferred destination are its reasonably priced labor, favorable business ambiance and availability of expert workforce. Considering its escalating growth, IBM has plans to increase its business process outsourcing (BPO) functions in India besides employing 5,000 workforces to assist its growth.

In the next few years, the industry is all set to witness some multi-million dollar agreements namely:

  • A 5 year agreement between HCL Technologies and News Corp for administering its information centers and IT services in UK. As per the industry analysts, the pact is estimated to be in the range of US$ 200-US$ 250 million
  • US$ 50 million agreement between HCL Technologies and Meggitt, UK-based security apparatus manufacturer, for offering engineering facilities.
  • Global giant Walmart has short listed there Indian IT dealers namely Cognizant Technology Solutions, UST Global and Infosys Technologies for a contract worth US$ 600 million

India's domestic IT Market

India's domestic IT Market over the years has become one of the major driving forces of the industry. The domestic IT infrastructure is developing contexts of technology and intensity of penetration.

In the FY 2008-09, the domestic IT sector attained revenues worth US$ 24.3 billion as compared to US$ 23.1 billion in FY 2007-08, registering a growth of 5.4%. Moreover, the increasing demand for IT services and goods by India Inc has strengthened the expansion of the domestic market with agreements worth rising up extraordinarily to US$ 100 million. By the FY 2012, the domestic sector is estimated to expand to US$ 1.7 billion against the existing from US$ 1 billion.

Government initiative in India's domestic IT Market

  • The Indian government has established a National Taskforce on IT with an aim of formatting a durable National IT Policy for India
  • Endorsement of the IT Act, which offers an authorized structure to assist electronic trade and electronic operations.

Major investments in India's domestic IT Market

  • According to Andhra Pradesh Government the state's SEZs and Software Technology Parks of India (STPI) will witness an investment of US$ 3.27 billion in the next few years.
  • VMware Inc, San Francisco-based IT firm is looking forward to invest US$ 100 million by 2010 in India.
  • EMC Corporation's total Indian assets is expected to reach US$ 2 billion by 2014

Future of Indian IT Industry

The Indian IT sector persists to be one of the flourishing sectors of Indian financial system indicating a speedy expansion in the coming years. As per NASSCOM, the Indian IT exports are anticipated to attain US$ 175 billion by 2020 out of which the domestic sector will account for US$ 50 billion in earnings.

In total the export and domestic IT sector are expected to attain profits amounting to US$ 225 billion along with new prospects from BRIC nations and Japan for its outsourcing operations.