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The market

  • IT/ ITeS sector is expected to contribute over 6.1 percent of India’s GDP for FY2010, an increase from 5.2 percent in 2008-09.
  • The IT-BPO is expected to reach USD 73.1 billion in FY2010, an aggregate growth rate of 5.4 percent. Export revenues including hardware is estimated to reach USD 50.1 billion in FY2010 and domestic revenues of about USD 23 billion.
  • Direct employment in expected to reach nearly 2.3 million, an addition of 90,000 employees, while indirect job creation is estimated to touch 8.2 million.
  • The Export revenues are estimated to USD 50.1 billion in FY2010, accounting for 69 percent of the total IT-BPO industry revenues. Software and services exports are expected to account for over 99 percent of total exports.

Opportunities:

  • Low cost delivery location

– India offers the low cost delivery location as compared to other offshore locations; savings of 70 percent over source locations.

  • New verticals and segments

– Significant opportunities exist in terms of new verticals such as healthcare, retail, public sector, travel and tourism and new segments such as Small Medium Business (SMBs) segments.

  • R&D product innovation

– Emergence of platform solutions and innovations in technology such as cloud computing, virtualization, open source software and service oriented architecture.

  • KPO market

– The BPO sector has been moving up the value chain in the global outsourcing industry from the low-end processes to high-end tasks such as business analytics and other knowledge services.
– The worldwide KPO market is expected to be around USD 16.7 billion in revenues by 2010 of which USD 12 billion (70 percent) would be outsourced to India.

  • Small Medium Business (SMBs) segment

– SMBs accounts for nearly 30 percent of the total IT spend (USD 6.5 billion) and provides a relatively untapped growth opportunity for India’s IT-BPO sector.

  • e-Governance

– E-Governance presents a significant opportunity to actively collaborate with government for the projects such as The Unique Identification (UID) project, e-District, e-Court, e-Office and central excise.

Source: NASSCOM Strategic Review 2010 and Press Articles

Industry – Snapshot

Size (2010E) USD 73.1 bn
Size (2011E) USD 77.3 bn
CAGR 2007-2010 15 percent
Exports (2010E) USD 50.1 bn
Exports Growth Rate 5.4 percent p.a.
Select foreign players in India Genpact, Aegis, Microsoft, IBM, HP, Dell, EDS, Cap Gemini, Accenture, Oracle, SAP, etc.
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