India's IT market to be worth $43 B by 2006: IDC

By siliconindia   |   Wednesday, 30 July 2003, 19:30 IST
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BANGALORE: India's IT market was forecast by an industry monitor on Wednesday to grow 27.9 per cent annually to be worth Rs 1.96 trillion ($42.6 billion) by 2006. International Data Corp said India's IT sector was more stable than the worldwide market and total domestic spending on information technology would grow 21 per cent every year to reach Rs 559 billion within three years. "The last year for the information technology industry was full of fear, uncertainty and doubt and decision being taken with a great degree of trepidation," said IDC India managing director, Pradeep Gupta. "This was mainly attributed to the dot-com crash, the slide in the US economy, the telecom capacity glut and the events of September 11 and its aftermath," Gupta told a business conference in Bangalore. He said the industry crashed with worldwide spending on technology declining from 10.8 per cent in 1999 to a negative 4.1 per cent in 2002. IDC predicted the industry would show signs of revival in the year ended March 2003 but that did not materialize due to accounting scandals, a rise in oil prices and the Iraq war. "IDC's research shows that the revival will start in 2003 with the worldwide IT spending growth rate expected to revive and grow at 3.7 per cent," Gupta said. The sector's growth in India would continue to be driven by exports and the outsourcing of business. "The share of exports in the total IT market is expected to increase to 71 per cent from the current levels of 65 per cent," it said. "IT-enabled services will grow at an annual rate of 52.4 per cent until 2006." Gupta said growth for Indian technology services will be limited to between six and seven per cent in the future from earlier figures of more than 20 per cent. "In this new landscape opportunity will be a little harder to find and share will be a little harder to preserve. The new mandate for the industry is to focus on return on investment, industry specific solutions, wireless, converged devices, security and outsourcing," he said. Software areas which would grow rapidly include the management of content, products, security and logistics. Gupta said Internet and mobile telephony offered an opportunity for Indian firms in the areas of billing, remote access management, streaming video content and providing integration services. "Within 10 years one out of every three IT industry employees will work in emerging countries so India will stand to benefit," he said. IDC projected that by 2006 there would be three billion cellular phone users around the world, with 50 per cent of them Internet users.

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