India IT spend to reach US$89.3B

Driven by domestic consumption, country's IT spending will grow 11 percent from 2009 to 2013, Gartner report notes.

India's IT spending will reach US$89.3 billion by the end of 2013, growing at a compound annual growth rate of 11 percent, according to a new report by Gartner.

In report released Wednesday, the analyst firm described India as a "vastly under-penetrated IT market relative to its potential" and one where growth will be led by the increasing acceptance of technology, as IT buyers expand and mature and consumers increasingly recognize the benefits of IT.

In the report, Aman Munglani, Gartner's principal research analyst noted that India's GDP (Gross Domestic Product) grew more than 6 percent during the recent global economic crisis. This growth, along with the local IT market growth, have been largely driven by domestic consumption, leaving India less exposed to the global economic cycles compared to other emerging markets, he added.

IT End-User Spending Forecast, India, 2009-2013

 

2009

2010

2011

2012

2013

CAGR
2009-2013

percent

Computing Hardware (US$M)

6,400

7,412

8,818

10,267

11,679

16.20

Software (US$M)

2,215

2,477

2,803

3,186

3,604

12.90

IT Services (US$M)

6,163

7,403

8,636

10,066

11,777

17.60

Telecommunications (US$M)

43,987

49,767

54,160

57,637

62,295

9.10

Total IT (US$M)

58,765

67,059

74,419

81,155

89,356

11.00

Source: Gartner (March 2010)

Among the four key tech sectors, IT services sector will clock the strongest growth at 17.6 percent and account for 13.2 percent of India's overall ICT market by 2013. Gartner noted that in 2009, IT services generated US$6.1 billion revenues, making up over 10.4 percent of total IT spend.

The telecommunications sector will experience the slowest growth, average 9.1 percent between 2009 and 2013. This segment, however, accounts for the bulk of overall IT spending.

One of the strong drivers for IT growth in India is government infrastructure projects, said Gartner.

Manufacturing industry is also expected to see strong growth, the research firm noted, pointing to communications, utilities and retail as some of the key industries driving growth.

The report also forecasted growth in the Indian PC market to be driven by consumers and small businesses, expanding by 19 percent this year and more than 21 percent in 2011.

Gartner explained that enterprises will be looking at alternate PC delivery technologies based on desktop virtualization to lower their PC acquisition costs.

In software spending, India is ranked among the top four markets in the Asia-Pacific region in terms of market size and growth prospects, said Gartner. Spending in software for the country is predicted to grow at 12.9 percent through to 2013, higher than the regional average of 10.8 percent.