Indian IT sector scores 10-on-10

DQW News Bureau New Delhi, Jan 23

Nasscom announced key findings of the Strategic Review 2007. The
highlights of the findings indicate that the Indian IT industry has grown its
revenues 10-fold in the past decade, from $4.8 billion in FY 1997-98 to $47.8
billion in FY 2006-07. Its contribution to GDP is estimated to have grown from
1.2 to 5.4 percent in the same period. The report will be formally released at
its 15th annual summit-Nasscom 2007: India Leadership Forum', scheduled from
Feb 7 to 9, 2007 in Mumbai.

Commenting on the key findings of the Strategic Review 2007, B
Ramalinga Raju, Founder and Chairman of Satyam Computer Services and Chairman,
Nasscom, said, "The last decade is testament to the growing impact that the
Indian IT industry has on the global and local economies. The industry is
perfectly poised to tap new opportunities in the offshoring and domestic
segments for greater wealth and IP creation for the country."

Kiran Karnik, President, Nasscom said, "Indian IT industry's
consistent growth in both exports and domestic segments and its ongoing
expansion into new potentially high growth opportunities reaffirms the continued
confidence and global competitiveness of the Indian IT sector. We are confident
that the industry will achieve its ambitious target of $60 billion in exports in
2010. The challenges faced by industry are being addressed jointly by the
industry, government and other stakeholders through both short and long term
solutions. Optimistic market signs indicate there is more headroom for growth,
through large unaddressed areas and the possible unbundling of IT-BPO mega-deals
with increasing shares of global delivery. The other positive sign is the
maturing of the domestic IT industry. For the first time ever, the domestic
industry has broken out of the hardware linked growth pattern and Indian firms
are playing an increasing role within this segment."

 Highlights

• Steady growth:
  The Indian IT-ITeS sector (including the domestic and exports segments) is
  expected to exceed $47.8 billion in annual revenue in FY07, an increase of
  nearly 28 percent in the current fiscal

• Service-line expansion:
  Aiding service providers to take on larger and more complex deals, and is
  driving up the average size of contracts awarded to Indian firms. Indian
  service providers have grown their share of contracts of values in excess of
  $50 million dollars from one percent in 2002 to seven percent in 2006

• Employment trends and
  Nasscom initiatives: Total IT software and services employment to
  reach 1.6 million in FY07. The industry in collaboration with the government
  and other stakeholders has initiated several initiatives to further enhance
  the availability and access to suitable talent for IT-ITeS in India

• Domestic market matures: Complements
  the continued growth in IT-ITeS exports and for the first time ever in FY
  2006 showed signs of breaking out of the hardware led growth and the trend
  of software and services gaining share is expected to continue

• Global markets:
  While US and UK remain the dominant markets for IT-ITeS exports, revenues
  from newer markets are growing rapidly

• Growth verticals: BFSI,
  telecom and high-tech continue to account for approximately 60 percent of
  the pie. Other verticals like manufacturing, retail, transportation,
  healthcare and utilities are also growing rapidly

• Emerging locations:
  As global delivery matures, newer locations are emerging; however India is
  expected to remain the undisputed leader

• Going forward:
  For India to fully capitalize on the opportunity and sustain a
  disproportionate lead in the global IT-ITeS space, stakeholders need to
  continue working towards timely execution of initiatives to address
  supply-side concerns across the following areas: Augmenting talent supply,
  creating world-class infrastructure, strengthening information security,
  enhancing operational excellence, providing regulatory support, catalyzing
  domestic market development and fostering an ecosystem for innovation.