IPCSI: Govt-Corporate-NRI Connect

The Indian information technology (IT) industry has played a key role in putting India on the global map. Thanks to the success of the IT industry, India is now a power to reckon with. According to the annual report 2009-10, prepared by the Department of Information Technology (DIT), the IT-BPO industry is expected to garner a revenue aggregate of US$ 73.1 billion in 2009-10 as compared to US$ 69.4 billion in 2008-09, growing at a rate of over 5 per cent. The report predicts that the Indian IT-BPO revenues may reach US$ 225 billion in 2020.

As per a report by the Internet and Mobile Association of India (IAMAI) and market research firm IMRB, the total number of Internet users in India reached 71 million in 2009. The number of active users increased to 52 million in September 2009 from 42 million in September 2008, registering a growth of 19 per cent year-on-year, stated the report. According to IDC India, during January-March 2010, total PC sales in India reached 2,240,000 units registering a year-on-year increase of 33 per cent over the same period in 2009. Desktop PC sales witnessed a year-on-year increase of 18 per cent during January-March 2010, over the corresponding period last year to reach 1,436,000 units. The sales of Notebook computers also increased by 72 per cent year-on-year, clocking 803,000 shipments.

India is a preferred destination for companies looking to offshore their IT and back-office functions. It also retains its low-cost advantage and is a financially attractive location when viewed in combination with the business environment it offers and the availability of skilled people.

Wipro Ltd, an IT services company, has entered into a strategic collaboration with Hitachi Data Systems, to offer co-branded products and services on Hitachi Technology in India.
Software company, Tata Consultancy Services (TCS) has won a multi-year outsourcing contract from Norway-based telecom company, Telenor Norway to provide application maintenance and development services.
HCL Technologies has entered into a five-year IT infrastructure outsourcing deal with Singapore Exchange (SGX) for US$ 110 million. The company has also won a US$ 500 million strategic IT outsourcing contract from US-based drug manufacturer, Merck Sharp and Dohme (MSD).
Computer services firm, Mahindra Satyam has signed a four-year offshore contract with Denmark-based IT company, KMD for US$ 48 million.
Software exporter Patni Computer Systems won a five-year IT and back-office contract potentially worth around US$ 200 million from US-based health insurance provider Universal American.

The market for enterprise networking equipment in India is estimated to grow from US$ 1 billion in 2008 to US$ 1.7 billion by 2012, recording a compounded annual growth rate (CAGR) of 15 per cent during this period, according to a study by Springboard Research titled ‘Epicenter of Growth–Indian Enterprise Networking Equipment Market Report' released in December 2009.

Between April 2000 and March 2010, the computer software and hardware sector received cumulative foreign direct investment (FDI) of US$ 9,872.49 million, according to the Department of Industrial Policy and Promotion.
The total investments of EMC Corporation, a leading global player of information infrastructure solutions in India, will touch US$ 2 billion (over US$ 2.01 billion) by 2014.
Syntel, an IT company, plans to invest around US$ 50 million in its global development centre in Chennai.
Russian IT security software provider, Kaspersky Lab, will be investing US$ 2 million in its India operations at Hyderabad during the next financial year.

The government has constituted the Technical Advisory Group for Unique Projects (TAGUP) under the chairmanship of Nandan Nilekani. The Group would develop IT infrastructure in five key areas, which includes the New Pension System (NPS) and the Goods and Services Tax (GST)
The government set up the National Taskforce on Information Technology and Software Development with the objective of framing a long term National IT Policy for the country
Enactment of the Information Technology Act, which provides a legal framework to facilitate electronic commerce and electronic transactions
Setting up of Software Technology Parks of India (STPIs) in 1991 for the promotion of software exports from the country, there are currently 51 STPI centres where apart from exemption from customs duty available for capital goods there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales Tax. But the most important incentive available is 100 per cent exemption from Income Tax of export profits, which has been extended till 31st March 2011
Government is also setting up Information Technology Investment Regions (ITIRs). These regions would be endowed with excellent infrastructure and would reap the benefits of co-siting, networking and greater efficiency through use of common infrastructure and support services

Moreover, according to NASSCOM government, IT spend was US$ 3.2 billion in 2009 and is expected to reach US$ 5.4 billion by 2011. Further, according to NASSCOM, there is US$ 9 billion business opportunity in e-governance in India.

The Indian information technology sector continues to be one of the sunshine sectors of the Indian economy showing rapid growth and promise. According to a report prepared by McKinsey for NASSCOM called 'Perspective 2020: Transform Business, Transform India' released in May 2009, the exports component of the Indian industry is expected to reach US$ 175 billion in revenue by 2020. The domestic component will contribute US$ 50 billion in revenue by 2020. Together, the export and domestic markets are likely to bring in US$ 225 billion in revenue, as new opportunities emerge in areas such as public sector and healthcare and as geographies including Brazil, Russia, China and Japan opt for greater outsourcing.