India IT Market

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India IT industry is the only industry in the country that has outperformed all others in the battle against the global competition. In fact, Indian IT industry went through a dream run to grow from a meager US$ 150 million in 1991-92 to an astounding US$ 5.7 billion in 1999-2000. Taking its advancement further ahead, the Indian IT industry has taken itself to a new height to be at par with the global leaders in the current days.

The term 'Information Technology' (IT), as defined by the Information Technology Association of America (ITAA) is the "study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." India IT market consists of all the companies that use computer and computer software to convert, store, protect, process, transmit and retrieve information or data.

Inside the Industry

India IT market emerges across four broad sectors:
  • IT Services
  • Software Products
  • IT Enabled Services (ITeS)
  • E-business
Indian IT companies encompass various aspects of computing and technology covering almost every segment of human activities. The duties performed by the professionals in IT companies include:

  • Software Development
  • Management Information System
  • Data Management
  • Computer Networking
  • Data Security

The Growth of Indian IT Market

Since 1991, the Indian IT market has seen a substantial growth rate as the software exports from the country have consistently been over 50% during this period. The total revenues of software exports reached at ` 46100 crores. The total exports also soared up from 4.9% in 1997 to 20.4% in 2002-03.

Software exports in India have played a major role in the economic development of the country. The software and services revenue of the country also soared up from US$ 22 billons in 2004-05 to US$ 28.5 billions in 2005-06 with a growth rate of 32%.

Not only in the software exports, India IT market has also considerably grown in the domestic sector as well. It saw a growth rate of 24% in the domestic market.

Following chart showcases the performance of Indian IT market over the years. The figures are in US$ million:
Year 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01
Domestic Software Market 490 670 920 1250 1700 2450
Software Exports 734 1085 1750 2650 4000 6300
Indian Software Industry 1224 1755 2670 3900 5700 8750


Following chart describes the progress rate of Indian software market (Figures are in US$ billion):

Year 2003-04 2004-05 2005-06
IT Software and Service Export 9.2 12.0 15.2
ITes / BOP Exports 3.6 5.2 7.3
Domestic Market 3.9 4.8 6.0
Total 16.7 22.0 28.5


The NASSCOM - McKinsey Report

A research work was undertaken by The NASSCOM - McKinsey to learn about the future of Indian IT market. The key findings of the report are:
  • IT export of the country will account for about 35% of the total export.
  • Software and Services will contribute 7.5% of the nation's overall GDP growth.
  • This industry will draw around US$ 4-5 billion Foreign Direct Investment.
  • Around 2.2 million jobs will be generated.



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