INFORMATION TECHNOLOGY AND INFORMATION TECHNOLOGY ENABLED SERVICES (ITES)

The Information Communication Technology and Electronics is the world's largest and fastest growing industry and is increasingly finding applications in all sectors of the economy. Today, India is a large, vibrant and one of the fastest growing economies in the world. As a result of impressive growth of the economy, steadily increasing purchasing power of the people and aspirations of the young, India is one of the fastest growing markets for electronic gadgets. The domestic demand for electronic hardware is estimated at US$ 400 billion by 2020.

High offshore component of delivery and superior execution in multi-location delivery continue to be key differentiators. Broad-based industry structure; IT led by large Indian firms, BPO by a mix of Indian and MNC third-party providers and captives, reflects the depth of the supply-base. While the larger players continue to lead growth, gradually increasing their share in the industry aggregate; several high-performing Small and Medium Enterprises (SMEs) also stand out.

With a large pool of skilled manpower-chartered accountants, doctors, MBAs, lawyers, research analysts-India would be able to add value to the global KPO business and its high-end processes like valuation research, investment research, patent filing, legal and insurance claims processing, online teaching, media content supply, among others. Skilled manpower and multi lingual capabilities combined with the advantages of lower costs can help the country to emerge as a frontrunner in KPO, globally. Increasing adoption of technology in the domestic industries is already beginning to reflect in their enhanced performance and competitiveness.

Production Profile

Source: Annual Report 2010-11, Information Technology, Department of Information Technology

ITES-BPO Sector

The Indian IT-BPO Industry has witnessed a robust recovery in 2010-11 from the economic crisis of 2007-09. The revenue aggregate of IT-BPO industry is expected to grow by 19.2 per cent and reach US$ 88.1 billion in 2010-11 as compared to US$ 63.9 billion in 2009-10.

The Indian domestic IT markets continues to grow in 2010-11:

• The revenue from the domestic market (IT Services, software products and BPO) is expected to grow from US$ 14.2 billion in 2009-10 to US$ 17.1 billion in the year 2010-11, an anticipated growth of about 20.4 per cent.

The IT-BPO Industry has enormous potential to grow in the year to come. By the fiscal year 2015, the industry's aggregate revenue is expected to reach US$ 130 billion, a Compound Annual Growth Rate of about 14 per cent from the year 2010-11 and contribute about 7 per cent to India's GDP.

Employment

This sector has grown to become the biggest employment generator and has spawned the mushrooming of several ancillary industries such as transportation, real estate and catering. Direct employment within the IT-BPO sector is expected to by 10.4 per cent to reach 2.5 million in 2010-11 with over 240,000 jobs being added during the year. The indirect employment attributed to the sector is estimated to be about 9 million in 2010-11 as compared to 8.2 million in 2009-10.

Exports

• The Indian software and services exports including ITeS-BPO exports is estimated to be US$ 59 billion in 2010-11, as compared to US$ 50 billion in 2009-10, an increase of 18.0 per cent.
  
  
• The IT services exports is estimated to be US$ 33.5 billion in 2010-11 as compared to US$ 27.3 billion in 2009-2010, showing a growth of 22.7 per cent.
  
  
• BPO exports are estimated to grow from US$ 12.4 billion in 2009-10 to US$ 14.2 billion in 2010-11, a year-on-year growth of 14.5 per cent.
  
  
• IT services contributed 57 per cent of total IT-BPO exports in 2010-11 followed by BPO at 24 per cent and software products/engineering services at 19 per cent.
  
  
• The share of emerging markets in total exports has increased from 9.4 per cent in 2009-10 to 9.7 per cent in 2010-11. This trend towards a broader geographic market exposure is positive for the industry, not only as de-risking measure but also as a means of tapping new markets.
  
  
• The US and the UK remain key markets for Indian IT-ITeS exports in 2010-11 accounting for about 61.5 and 17.2 per cent of total IT-BPO exports respectively.