Indian IT industry @ $55 b by 2008: IDC

NEW DELHI: Driven primarily by its booming BPO and IT exports market, the overall Indian IT industry will grow to Rs 2,47,000 crore ($55 billion) by the end of calendar year 2008 from Rs 87,000 crore in 2003, according to a study conducted by market research firm, IDC India.

The report states that the Indian IT industry will witness a compound annual growth rate of 23.1 percent between 2003 and 2008 with exports growing 25.3 percent and domestic market 18.5 percent.

"Growth in exports between 2003 and 2008 will be primarily driven by BPO or IT-enabled Services which is expected to grow at a high compound annual growth rate of 36 percent. IT services exports is expected to grow at 19 percent during the same period," informed IDC (India) country manager, Kapil Dev Singh while presenting the study during IDC's annual event - 'Directions 2005'.

In 2003, the Indian IT industry grew 21 percent at Rs 87,000 crore ($19.5 billion) from Rs 72,000 crore in 2002, and in 2004 growth is likely to be in the order of 26 percent with ITeS expected to register 51 percent growth.

According to IDC, the domestic IT market has revived with 17 percent growth in 2003 after seeing the lowest growth rate of six percent in 2002 in the last 15 years.

"This growth rate has been made possible on the back of strong global economic recovery and a will to spend,” Singh added. IDC predicts that this growth trend is going to continue with it peaking up in 2005 at 21 percent, with all three components hardware, software and services expected to grow at a decent pace. This kind of growth in 2003 makes India the fastest growing and fourth largest domestic IT market in the Asia-Pacific region.

The break-up in terms of exports and domestic revenues is in favor of the exports, which is expected to increase its share from 65 percent to 71 percent during 2003-08. The export market is expected to grow at a CAGR (2003-08) of 25.3 percent, whereas the domestic market will grow at 18.5 percent.

Talking about the domestic outsourcing trends in the country, Singh said, “Big companies have already started outsourcing activities and this trend is likely to pick up as we move forward.”

In terms of high growth areas in 2003, smart handheld devices, inkjet MFDs, notebooks, system infrastructure software, security and IT outsourcing have been the frontrunners. In terms of the growth perspective for 2003-08, according to IDC it is going to hover around two critical aspects of converged devices and management of IT environment.