Booming Indian tech sector expects further growth

The Indian IT industry is expected to generate $64bn in revenues in 2008 and $75bn by 2010, significantly boosting the country's economy
Written by Tim Ferguson, Contributor

The Indian technology industry is expected to generate around $64bn (£32bn) in revenues in 2008 — 33 percent growth — making a significant impact on the country's economy.

Services and software exports are expected to contribute around $41bn, with the domestic market generating more than $23bn, according to Indian technology industry body, Nasscom.

The Indian technology industry is aiming to hit total revenues for software and services of $75bn by 2010.

But Nasscom's 2008 Strategic Review shows the growth of the industry has had other benefits besides lining the pockets of India's mega-corporations.

As a proportion of national GDP the Indian technology sector will hit 5.5 percent in 2008, up from just 1.2 percent in 1998. It is also expected to contribute a net value to the economy of up to 3.9 percent.

The Nasscom study found the industry has also fuelled a 36 percent increase in direct exports and boosted direct employment by a compound annual growth rate of 26 percent over the past decade.

And, by the end of the 2008 financial year, almost two million Indian workers will be employed in the technology industry.

The industry has also contributed to an increase in consumer spending — for every rupee earned by the Indian technology-business process outsourcing (BPO) industry, an additional rupee is spent in the economy.

The influence of the sector on other parts of Indian life is also felt through contributions to community initiatives, human-resource development, education, health and empowerment in business.

The technology industry has also fuelled the growth of private-equity and venture-capitalism funding and spurred entrepreneurship.

Som Mittal, Nasscom's president, said the industry is on track to exceed its 2010 targets but still needs to resolve issues around talent, manpower and infrastructure.

Nasscom chairman Lakshmi Narayanan said the increase in revenues "reinforces the confidence of global corporations in India".

Narayanan, also vice-chairman of Cognizant, said the Indian IT-BPO industry is poised for broad-based growth, strengthening its position as "the primary sourcing location" for software, IT infrastructure and business process-related services.

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