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Outsourcing main driver of global growth
ICE World Bureau | February 16, 2006 03:43 IST
Spending on the IT-ITES sector witnessed steady growth worldwide in 2005, riding on healthier spending across key markets of the US and western Europe, and strong growth in emerging markets.
Outsourcing continued to be the primary growth engine with global delivery forming an integral part of the strategies adopted by customers as well as service providers. These were the findings of Strategic Review 2006 — The IT industry in India.
The Indian IT-ITES industry is expected to exceed $36 billion in annual revenue in 2005-06, a growth of nearly 28 per cent. It has grown at a CAGR of over 28 per cent since 1999-2000.
Over the same period, the industry's contribution to the GDP has risen from 1.9 per cent in FY 1999-2000 to a projected 4.8 per cent in the current fiscal.
The hardware, ITES-BPO, engineering and R&D services segments accounted for 21 per cent, 18 per cent and 14 per cent, respectively.
The segment composition of industry revenue is likely to remain unchanged — weighing towards the services and software segments — in FY 2005-06.Export earnings accounted for 64 per cent of the total IT-ITES aggregate in 2004-05. Strong fundamentals, including a large base of skilled talent, demonstrated quality and service delivery expertise at a significant cost advantage and an enabling environment have ensured that India attracts a larger share of the global IT-ITES demand for off-shored services.