New Delhi, August 10, 2008
The Economic Times
The domestic IT demand grew 34 percent in 2007-08, compared with 27 percent for exports, which is the opposite of what happened the last fiscal, says the annual IT industry survey of Dataquest - the flagship publication of CyberMedia Group.
"Finally, the day of reckoning has come," says the soon-to-be-released survey. "And what a convincing difference it has been - 34:27," say the findings of its 25th annual edition.
In value terms, exports, at Rs.1,897.92 billion ($47.45 billion), still account for two-thirds of total revenues while the domestic sales were estimated at Rs.990.18 billion ($24.75 billion).
The jury is still out on the actual reasons behind the remarkable reversal, and the sceptical IT industry honchos offer several - like small base for the domestic market and the appreciation of the rupee that has slowed down export growth.
"Interestingly all this is true. But that does not take away from the creditable performance of India's domestic IT market," it says, while attributing the trend reversal to a 65 percent growth in business process outsourcing (BPO) industry.
The value of outsourcing depends largely on the structure of the relationship. This is where Indian domestic transactions in the BPO space underwent a major shift in fiscal 2007-08, the survey says.
"At $24.5 billion, the Indian domestic IT market is not exactly a small market. Yet, in dollar terms, it grew 50 percent. In other words, it added half of itself to it."
The survey also finds that some interesting trends in the outsourcing industry - where the players are evolving from short-term, project-driven deals to longer-term, comprehensive outsourcing initiatives - will help the IT industry.
"Over the next few years, staff augmentation and project-based deals would gradually dwindle to be replaced by more comprehensive outsourcing engagements," the survey adds.
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