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IT in India is surging ahead

The global economic slowdown has no impact on the IT industry in India, says the annual survey conducted by Dataquest

Monday, September 08, 2008

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NEW DELHI,INDIA: Though the global economic meltdown had raised concerns over the future of the IT and allied industries, in India these segments have a strong foothold and are surging ahead, says the annual survey conducted by Dataquest, the flagship publication of CyberMedia.

The survey says FY 2007-08 was memorable for two reasons: The rupee upstaged the dollar, and the domestic market, for the first time in Indian IT's successful journey, grew faster than the exports market.

An accelerated 34 per cent growth in 2007-08 FY 08 (as compared to 27 per cent in FY 07) took the total domestic IT market to Rs 99,018 crore in FY 08 reversing the decade-old trend of export industry growing faster than the domestic market, it said.

Within this the hardware industry, comprising personal computers, servers, peripherals, networking and storage products, contributed Rs 49,589 crore. The rest was contributed by domestic IT services (Rs 26,756 crore) and software (Rs 12,179 crore).

The overall Indian IT industry grew 29 per cent in FY 08 to report revenues of Rs 288,810 crore. Exports, contributed largely by software and services, accounted for nearly two-thirds of the industry at Rs 189,792 crore, grew at 27 per cent. During 2006-07 it had grown by 35 per cent.

"Despite the downturn and the challenging economic climate, the top IT services companies managed to keep growth up and their margins intact. This shows the amazing resilience of the Indian IT powerhouses," said Pradeep Gupta, Chairman, CyberMedia.

BPO Services (voice only) marked a 65 per cent growth during this time, thus contributing Rs 8,600 crore and training contributed Rs 1,894 crore, recoding a growth of 51 per cent.

Of the 8.25 million PCs sold in 07-08, more than 2 million pieces were notebooks, thus registering a growth of 59 per cent. This growth rate is twice that of desktops.

Dataquest attributes the handsome showing by domestic hardware segment to the spread of computing to smaller towns and cities of India as well as the rise in small businesses.

Another trend, according to the Dataquest survey, is that more and more users are switching over to LCD monitors, the market of which registered 68 per cent growth.

While 4.2 million pen drives were sold in the year, over one million digital cameras and 575000 MP3/MP4 players were lapped up by Indian consumers, the survey pointed out.

The revenue from the bank ATMs market stood at Rs 699 crore, marking a growth of 150 per cent. With the deployment of 9,300 new ATMs, the total base of ATMs in the country reached 34,500.

Regarding the slowdown in the growth rate of IT services exports, Prasanto K Roy, Chief Editor, CyberMedia said, "Exports may have slowed down, but the really exciting story was the consistent growth in almost every sector of India's domestic IT market: hardware and services, SMB and enterprise, government…."

Infrastructure services emerged as the fastest growing segment in IT services exports registering 126 per cent growth, contributing Rs 11,959 crore or 9 per cent to the total IT services market.

The areas in the domestic IT market that failed to grow along expected lines were package software, networking and storage, the survey said.

Dataquest estimates the market size with Indian rupee as the primary currency. In FY 08, for the first time, the rupee actually accelerated sharply against the dollar, resulting in a higher growth rates when calculated in dollar terms. For example, the entire IT industry grew 44 per cent in dollar terms, as compared to 29 per cent in rupee terms.

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