Indian IT Sector to be second largest
Indian IT industry may be passing through a rough patch because of a slowdown in the US economy and high inflation rates, but this stage will pass. India will continue to drive the global IT market for the next few years, says a study.In fact, it will emerge as the second most important IT industry in the world after the US in terms of revenue and employment. “India will create the second largest IT services labour pool after the US within the next seven to eight years. That’s not all, domestic IT industry’s contribution to our GDP is likely to rise from 0.8% in 2006-07 to 2.65% by 2015-16,” says a yet to be released white paper ‘India’s Role in the Globalization of the IT Industry’ by Evalueserve, a KPO.It says, “By 2015-2016, the number of professionals working in the IT industry will grow ten-fold (from 2001-2002) and the total revenue will grow 22 times.” This means, the IT industry is likely to employ 3,750,000 professionals and record $193.1 billion in revenue by 2015-16.“Since India’s GDP is growing at 8.5% per annum in real terms and 14% in nominal terms, by 2015-16 our GDP is likely to be $2,400 billion. Given this, the IT industry is likely to constitute 8.05% of India’s GDP,” it says. While in the last decade, IT services exports (including engineering services, R&D, and those related to creating and maintaining software products) have been growing at 32% annually. Evalueserve estimates this growth rate will taper off and become around 20% in the next seven to eight years. The reason: rising wages, lack of high quality talent, and IT jobs relocating to other low-cost destinations in Eastern Europe and Latin America.The paper thus concludes: First, by 2016 India will have the second highest number of IT professionals in the world after the US. In fact, US will employ between 1.25 to 1.33 times more professionals than India. Second, even in 2016, the US IT industry will generate approximately $810 billion in annual revenue, which would be almost five times the revenue of the Indian IT industry. And third, since the IT industries in both the US and India have become inextricably linked with one another, both countries will import and export more IT services and products for the next seven to eight years.
Labels: India IT Sector