IT & ITeS see $36bn revenue in FY06

(Ecomonic Times, The (India) (KRT) Via Thomson Dialog NewsEdge) Feb. 10--MUMBAI, India -- The Indian IT and IT-enabled services sector is on track to grow by 28 percent and mop up over $36bn in revenue in FY06. Out of this, software and services exports will bring in $23.4bn (a growth of 32 percent), while hardware will contribute $6.9bn and the domestic market will account for $6.1bn.

The share of the booming sector in India's GDP is also increasing steadily. The IT and ITeS sector contributed about 4 percent of GDP in '04-05 and is expected to reach 4.8 percent in FY06, according to the Nasscom Strategic Review '06."In spite of the growth, it is estimated that less than 10 percent of the addressable market for globally sourced IT-ITeS has been captured till date, indicating significant headroom for growth," Nasscom's president Kiran Karnik said, ahead of the Nasscom India Leadership Forum.The apex industry body is aiming for $60bn in exports by '10, provided the sector continues to grow at the current rate of 20-25 percent. In '05, the BPO sector contributed $5.2bn, of which $4.6bn were exports and the rest came from the domestic market. It is expected that domestic market will grow at 22 percent in the current fiscal.

"Healthy domestic market will fuel growth in sectors like banking, which rely heavily on IT applications," Mr Karnik said. The total employment in the current fiscal in IT software and services sector would reach close to 13 lakh.Currently, the BPO sector employs 230,000 people. Nasscom estimates there will be an addition of 4 lakh staff each in IT services and BPO sector by March 31, '06. S Ramadorai, Nasscom's chairman, and CEO and MD at TCS, said: "To continue growth in the sector, it is essential to focus on skill development to better leverage the world's largest working population." He said Nasscom was in talks with foreign investors to push for infrastructure development in tier II and tier III cities.