Monday, October 22, 2012

India IT Spending forecast 2016- Strong despite Inflation & Currency pressures

According to Gartner Inc., IT spending in India is expected to total USD 71.5 billion in 2013, a 7.7 per cent increase from the USD 66.4 billion forecasted for 2012 and expected to touch USD 95.9 billion in 2016.  Gartner forecasts the telecommunications market is the largest IT segment in India with spending forecast to reach USD 47.8 billion in 2013 and USD 59.5 billion in 2016 from USD 44.7 billion in 2012, growing at a CAGR of 3.6 per cent. The IT services market is poised to grow from USD 9.2 billion in 2012 to USD 10.3 billion in 2013 and then touch USD 16.1 billion in 2016. The Software market is expected to grow at a CAGR of 11.4 per cent from USD 3.5 billion in 2012 to USD 6 billion in 2016. The hardware market in India, with CAGR of 7.5 per cent is estimated to grow from USD 9.1 billion in 2012 to USD 14.3 billion in 2016. “India like other emerging markets continues exercising strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies,” Peter Sondergaard, senior vice-president and global head of research at Gartner said.

India IT spending is expected to grow as businesses are looking to IT to help support the challenges of improving customer support, supply chain management, provide their products and services online, optimize business processes and drive innovation in the business. Not only the businesses but government of India and state governments too are spending heavily on building and improving the IT infrastructure so that they can automate the various processes and provide services to citizens on line there by reducing waiting times, eliminating unnecessary paper works and making governance more transparent. Bids were called for some of the major projects by Governments at the center and state levels which were won by both Indian and Multi National players and work is going on a frantic pace. Indian IT industry is also expected to generate more than 4.5 million jobs and it is one of the critical parts of the Indian economy. There has been a major transformation where in IT is no longer a back office function but a front line function with significant business impact for both businesses and governments.