Less foreign demand, Indian IT turns to govt.

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Less foreign demand, Indian IT turns to govt.
Bangalore: Domestic demand is luring Indian IT firms, who have been facing tough times due to fewer projects from U.S. and UK. Contracts from government agencies are the key demand drivers in the domestic market. IT majors like Tata Consultancy Services (TCS), Infosys and Wipro have already joined the race to get some of these projects.

Nasscom estimates that the domestic market would grow 15-18 percent, even as the export market is likely to grow a mere 4-7 percent in financial year 2010. With this growth forecast, the IT and BPO industry would earn $13 billion ( 67,000 crore) from the domestic market compared to $11 billion ( 57,000 crore) last year.

India's largest IT exporter TCS is looking forward to about $1 billion revenue from government contracts during three years period. The company has already been selected for two mission mode projects including the MCA-21 and Passport Seva Project. The company is also showing interest to participate in the Unique Identification (UID) Project, which will see huge investment from the government.

Though, government projects contribute very less to a company's revenue currently, with growing demand it could go up drastically in the coming years. "Revenue from government projects is still a very small part of our overall revenue. But in the next 2-3 years, we are looking at a double-digit revenue contribution from it," said Tanmoy Chakrabarty, Vice President and Head - Government Industry Solutions Unit, TCS to Business Line.

Like its competitor, Infosys is also looking to cash in on the opportunities available in the domestic market. The company had been concentrating on the domestic market only through its banking product 'Finacle', but now it has also started providing IT services at higher levels. In July, Infosys was granted the 'eBiz Project' by the Department of Industrial Policy and Promotion (DIPP). The project, through its single-window approach, will cater to the business life-cycle for all government-to-business services.

Infosys has also bagged a contract to set up and manage the central processing centre for the Income-Tax Department. "We are talking about $1 billion of booked business in the next 3-4 years from India," said Binod H. R., Senior Vice-President and Head, India Business Unit, Infosys.

Wipro is another IT bellwether, which is also vying for projects from the domestic market. Suresh Vaswani, Joint-CEO of Wipro had said that the company's plans for the local market have been somewhat 'conservative'. "We expect the business to be big in this space, and so the exercise is aimed at leveraging our full capability in tapping the opportunities," Vaswani added. The fourth largest Indian IT exporter HCL Technology is optimistic on the financial services and public sector space. The company plans to adopt a solutions led approach rather than building from scratch, when it comes to addressing the government market.

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