Buoyed by growth in exports and strong domestic demand, the Indian IT-ITeS industry has recorded $39.6 billion in revenues in 2006-07, up 30.7 per cent against a projected growth of 27 per cent, according to Nasscom. The industry body also projected a revenue of $49-50 billion in 2007-08 at a growth rate of 24-27 per cent.
Lakshmi Narayanan, chairman, Nasscom, said the tremendous double digit growth on a large base indicated that the fundamentals were very strong.
“We are growing well ahead of the global industry, which is growing at about 10 per cent a year. The domestic firms are launching new service lines and new products to increase the size of the addressable market. The industry’s competitiveness has been demonstrated with Indian IT firms’ enhanced role in global trade. The platform has been set for continued growth and India will continue to be the largest IT services provider.”
There was, however, one dark cloud. Nasscom President Kiran Karnik described the rupee appreciation as “too much and too fast”. For the time being, the sector has survived the scare, but we are worried about the rapid fluctuations, he added.
In 2006-07, software and services exports grew by 33 per cent to register a revenue of $31.4 billion, whereas the domestic segment grew by 23 per cent to $8.2 billion.
Within exports, IT services touched $18 billion, a growth of 35.5 per cent, while ITeS/BPO exports grew by 33.5 per cent to clock a revenue of $8.4 billion. Engineering services and products exports registered a revenue of $4.9 billion, up 23 per cent over the previous year.
“From a market opportunity perspective, the indicators continue to be positive with a potential addressable market of over $300 billion, driven by growth of existing business and new service line opportunities. The software and services industry continues to exceed forecasts year after year and we are confident of achieving the revenue forecast of $50 billion in FY08,” said Karnik.
“The industry was taking steps to address certain short-term challenges such as availability of talent, top-quality management, security and quality focus. The others issues concerning the industry such as rupee appreciation, infrastructure development and sustenance of a positive policy/ regulatory environment, require timely, consistent and continued effort from all stakeholders including industry, government, academia and Nasscom,” he added.
Nasscom also announced the list of top 20 software and services exporters’ ranking. TCS, Infosys and Wipro maintained their position as the top three exporters, whereas Satyam and HCL were at the fourth and fifth positions.
Of the $50 billion revenue projected for FY08, Nasscom estimated that the IT software and services exports would contribute $28-29 billion, followed by ITeS/BPO between $10.5-11 billion. The domestic market is expected to reach $10 billion, at a growth rate of 20-22 per cent.
“We were expecting that apart from the traditional financial services and telecom, the domestic market will see increasing traction from the transportation, retail and hospitality sectors,” added Karnik