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Indian IT market to top $50 billion next year

The software and services industry in India is still going from strength to strength according to NASSCOM's latest annual sector survey.

By Maggie Holland, 4 Jul 2007 at 15:00

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Boosted by the continued popularity of offshore outsourcing, the Indian IT software and services market enjoyed revenue of $39.6 billion (almost £20 billion) during the 2006/2007 financial year and is tipped to reach $50 billion (£25 billion) during the 2007/2008 fiscal calendar.

So says the National Association of Software and Service Companies (NASSCOM) in its annual survey analysing the performance of the sector in India, which highlighted TCS, Infosys and Wipro as the country's top three companies leading the way in terms of software and services exportation.

The last financial year's revenue showed growth of 30.7 per cent which overshadowed expectations of a more modest 27 per cent growth during that timeframe.

Furthermore, solid growth is expected to continue with the IT body suggesting next year's figures will show a 24 to 27 per cent increase in revenues.

"The software and services industry continues to exceed forecasts year after year and we are confident that the forecast (exports + domestic market) of $50 billion in FY07-08 will be achieved, as will the target of $60 billion exports by FY09-10. 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 services line opportunities," said Kiran Karnik, NASSCOM's president.

In terms of exports, the volume of services being exported have grown by 35.5 per cent to reach $18 billion (£9 billion), but to ensure continued success in this area and others in India, the country must be prepared to tackle some challenges, according to Karnik.

"While India continues to be the most preferred destination for global IT sourcing due to its talent pool, top-quality management and security and quality focus, there are certain short to medium term challenges that need to be addressed swiftly. These include rupee appreciation, suitability of available talent, infrastructure development and sustenance of a positive policy/regulatory environment. These require timely, consistent and continued effort from all stakeholders including industry, government, academia and NASSCOM," he added.