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.