Thursday, January 25, 2007

Indian IT-ITeS ‘07 Export Revenues Expected to Increase 32.6% to $31Bn – NASSCOM

According to a study by NASSCOM, an Indian IT and BPO industry trade lobby, export revenues of the Indian IT- ITeS industry for FY 2007 are predicted to increase at a rate of 32.6 percent to reach USD 31.3 billion as compared to USD 23.6 billion (an increase of 33.3 percent) in FY 2006. In addition, the total IT industry, including hardware sales, is predicted to reach about USD 47.8 billion in FY 2007 and USD 100 billion by FY 2010.

The IT industry is forecasted to contribute about 5.4 percent to the GDP of the country in FY 2007 as compared to 4.8 percent in FY 2006. A recent study of India’s IT and BPO sector, conducted by NASSCOM and McKinsey, predicted that the industry to be worth USD 60 billion by 2010. The current NASSCOM estimates are in line with the prediction. NASSCOM also predicts that the software exports will be required to grow at a CAGR of 24.2 percent for the next four years in order to achieve the target.

In addition, NASSCOM expects that the employment level in India’s software and services sector will reach the 1.6 million mark in FY 2007, representing a growth of 26 percent over the previous year. The export services contributing to the growth of the IT industry are expected to account for USD 18.1 billion in the FY 2007. The UK and the US were the largest market for exports in FY 2006. The Americas accounted for about 67 percent, Europe for 25 percent, and rest of the world for 7.7 percent.

Among other key findings, the domestic IT industry is anticipated to grow by 21 percent to generate revenues worth USD 15.9 billion in the fiscal year, with the software and services segment accounting for majority of the growth. The domestic hardware will contribute USD 7.6 billion, while USD 5.6 billion is expected to be attributed by services, followed by USD 1.6 billion from software and USD 1.2 billion by the BPO sector. MNC investments over the next few years are expected to exceed USD 10 billion for FY 2007.

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