The Indian Information Technology industry is expected to see about 12% growth to reach a market size of about Rs 1.8lakh crores by 2016, according to a new report.
IT services and software products will lead this growth due to an increase in IT adoption by companies, shift towards outsourcing and emergence of new technologies, said the report by Boston Consulting Group & Confederation of Indian Industries. There is a vast untapped domestic opportunity in the country. India spends less than 1% of its GDP on IT. This is significantly lower than the global average of 2.5%.
The contribution of Internet to the GDP in India is expected to increase from 4.1% to 5.6% in 2016 with an annual growth of 22% to reach a size of Rs 11 lacs crores by 2016, said the report. On the back of such opportunities, 700 billion dollar companies are expected to be in India by 2020. Till the year 2010, India had 141 listed billion dollar companies. For the year of 2011, the IT market in India is estimated at 99,700 cr out of which nearly half is made up of IT services segment followed by 32% by hardware segment. Other key insights
Current IT adoption in Banking is Rs 18,500 cr. Indian banking sector is growing at 18% and there are opportunities in customer relationship management, back-end management, data warehousing, e-payments and mobile banking, paymentsystems, outsourcing of ATMs and solutions to cater to RBI regulations.
The Telecom industry spends Rs 15,000 cr in IT. There are opportunities in building analytical tools to capture usage trends and track service levels. Enterprise solutions catering to the needs of large mid-sized companies as well as the SMBs.
The Manufacturing vertical spends Rs 12,300 cr in IT and adoption level is low. There will be opportunities in Value–adding industry specific applications for process improvements and performance enhancement, greater infrastructure outsourcing by large companies, low cost solutions and delivery model for
msmes including use of cloud.
Media publishing and entertainment spends are estimated to be Rs 10,700 cr. Analytics & business intelligence, increased needs for social media nad mobile based apps will provide opportunities.
The Indian retail sector, growing at 12%, is estimated to spend Rs 6600 cr on IT. Tools and dashboards for better CRM, retail POS etc, emerging technology like cloud and analytics and solutions catering to needs of online retail are opportunities.
Insurance vertical which will grow at 20% for the next decade will create opportunities for cloud based services to reduce cost, web 2.0 to improve customer service and integration of platforms.
Read the full report here.