Indian IT industry: Key facts

Started by dwarakesh, May 25, 2009, 12:33 PM

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Indian IT industry is going through one of its most challenging times. The industry which is credited of bringing India on the forefront of the global map is struggling with economic turmoil in its biggest market.

However, despite tough times and global economic uncertainty the industry is managing to show growth. Though the days of heady growth seem past (at least at present), the fact that global Fortune 500 companies still trust Indian IT for their technology needs shows the prowess of Indian IT.

Here's looking into all that makes for India's IT Inc.

dwarakesh

Offers price advantage

Cheaper salaries, a fifth of those paid to US and European IT workers, and a large pool of English-speaking graduates have helped outsourcers such as Tata Consultancy Services, Infosys and Wipro ride an outsourcing boom.

India's export-driven outsourcing companies have thrived for years by bagging contracts from overseas clients. At a time when there is a global recession and hundreds and thousands of people are being laid off, India's software industry employs about 1.6 million people.

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Export driven

The export-driven companies offer services ranging from managing complex computer networks and call centres to software coding to maintaining technology operations. General Electric, BT Group Plc, Citigroup, General Motors, and Qantas Airways are among their clients.

Tata Consultancy Services (TCS), Infosys Technologies and Wipro provide solutions like system integration, application development, supply chain designing and back-office services.

These firms are looking to expand in Europe and asia to combat the recession.

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Home to global tech cos

Global IT firms such as IBM, Accenture, and Microsoft have large service centres employing thousands of workers to serve global customers and bid

for deals also in the local market. IBM has more than 70,000 staff in India. Microsoft has a 5,500-strong Indian workforce.

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Industry size

India's export of software and services in the year ended March 31, 2009 is estimated to have grown 16-17 percent to about $47 billion, according to the lobby group National Association of Software and Service Companies (NASSCOM).

Total revenue of the software and back-office outsourcing sector, including sales from the domestic market, is estimated to have risen to $60 billion in the financial year 2008-09.

In the fiscal year to March 2008, the sector's export earnings was reported 29 per cent up to $40.4 billion.

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Growth counts

The sector, which accounts for five percent of the country's gross domestic product, is projected to earn $175 billion in exports by 2020, according to study by Nasscom and McKinsey.

India is the leader in the ICT Services according to world bank reports.

China is the next largest ICT services trader after India, with about $5.5 billion in ICT service exports.

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Satyam: The big fall

The sector was hit by a large accounting fraud at Satyam Computer, once ranked as the fourth-largest IT firm. Last month, mid-sized outsourcer Tech Mahindra won an auction for a controlling stake in Satyam.

The country's fourth largest IT company -- after TCS, Infosys and Wipro and ahead of HCL -- was for several years cooking its books by inflating revenues and profits, thus boosting its cash and bank balances; showing interest income where none existed; understating liability; and overstating debtors' position (money due to it).