India IT Industry Grows by 31% in 2006, Projected to Cross 100 B USD in 2011, Say IDC

NEW DELHI, INDIA – MAY 2, 2007 – The Indian IT/ITeS industry clocked INR 1,98,477 Crore of revenue in 2006, up by an impressive 31% over 2005. With equal drives from exports revenue and domestic IT spending, the Indian IT industry has been able to keep up with the momentum it gained since 2003. These numbers were released by IDC India on the occasion of Directions08, their annual briefing session for the ICT industry. This is 20th edition of Directions in India and also marks the completion of 20 years of IDC's operations in India.

(INR Crore) 2006 2007 2008 2009 2010 2011 CAGR 2006-11

Domestic IT Market 61761 75050 88011 101342 116177 132133 16.4%

Domestic ITeS Market 6650 11970 17955 24239 31511 36238 40.4%

Domestic IT/ITeS Market 68411 87020 105966 125581 147688 168370 19.7%

IT/ ITeS

Exports Revenue 130067 159889 190475 221844 254422 289857 17.4%

IT/ ITeS Industry Size 198477 246909 296441 347425 402110 458228 18.2%

IDC (India) Limited, 2007

The industry is projected to grow at 18% CAGR for the next five years time frame to cross an estimated INR 458,228 Crore of revenue in 2011, which means it will become a US Dollar 100 Billion plus industry. "This will be a significant milestone for the industry and will surely mean a lot in terms of contribution to the country's GDP, employment generation and a whole host of gains, which ICT usage brings along with it," commented Mr. Kapil Dev Singh, Country Manager, IDC (India) Limited.

On the domestic front, IT/ITeS spend has been estimated at INR 68,411 Crore in 2006, a gain of 26% over 2005. The growth in domestic IT/ITes spend has been primarily driven by investments by enterprises in IT infrastructure, line of business applications, security products and services, IT outsourcing and managed services and by consumers in mobile and digital products (digicams, notebooks, smart handheld devices etc.).

Domestic IT/ITeS revenues are projected to touch INR 1,68,370 Crore in 2011, at a CAGR of 19.7% (IT growing at 16.4% and ITeS at 40.4%). This also means that domestic IT/ITeS revenues will grow faster than IT/ITeS export revenues for the next five-year period.

'The domestic IT/ITeS market has attained a significant size now but continuing with the same growth momentum for the next five years is not going to be an easy task. It will require the industry to create new user segments, identify new uses of ICT, define new relevance of ICT in the consumers' life and help develop the ecosystem required for that by designing innovative products and services,' commented Mr. Singh.

The domestic market has moved into a new phase where just affordability is not a concern, availability of the right products/services and applicability of IT has gained more prominence and a healthy orchestration of these 'three As' will help the market grow.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com .

About IDC India

IDC (India) Ltd., set up in 1987 is an ISO 9001:2000 company. IDC (India) Ltd. is a subsidiary of CyberMedia and is regarded as the country's most comprehensive, dependable and respected source for market intelligence and consulting in the fields of IT, telecommunications and consumer technology. With its head office at Gurgaon (near New Delhi), the company has branches in Bangalore, Chennai, and Mumbai. Additional information about IDC India's research, advisory and Go-To-Market service offerings can be found at www.idcindia.com .

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