The Hindu : Business : IT revenue to cross $47 b

Online edition of India's National Newspaper
Wednesday, Jan 24, 2007
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Business

Business

IT revenue to cross $47 b

Staff Correspondent

Industry poised to tap new markets

MUMBAI: The Indian IT-ITES sector (including domestic and exports segments) is expected to exceed $47.8 billion in annual revenue in 2006-07, an increase of nearly 28 per cent in the current fiscal, according to key findings of the Strategic Review 2007 released by the National Association of Software and Service Companies (Nasscom). The report will be formally released at Nasscom's annual summit next month but the highlights announced on Tuesday at a press briefing indicate that the domestic IT market broke out of the hardware linked growth pattern for the first time ever in 2005-06 and the trend of software and services gaining share is expected to continue.

The industry has grown its revenues ten fold in the past decade from $4.8 billion in 1997-98 to $47.8 billion in 2006-07, while its contribution to the Gross Domestic Product (GDP) is estimated to have grown from 1.2 per cent to 5.4 per cent in the same period. The total domestic IT market is expected to cross $15.9 billion in 2006-07, recording a 21 per cent growth.

Commenting on the findings, 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 is having on the global and local economies. The industry is perfectly poised to tap new opportunities in offshoring and domestic segments for greater wealth and intellectual property (IP) creation for the country.

The target of $ 60 billion software exports should be accomplished at even lower growth rates than those achieved this year. In fact, if we continue to grow at last year's rates, the industry could touch $100 billion by 2010.''

Kiran Karnik, President, Nasscom, said, "Optimistic market signs indicate that 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.''

The service and software exports remain the mainstay of the sector contributing $31.3 billion, with a 32.6 per cent growth and thus beating the forecast.

The total size of the domestic market is expected to cross $15.9 billion in 2006-07, a growth of 21 per cent over the previous year. While this segment has been traditionally led by MNCs, Indian firms are gradually gaining ground.

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