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Indian IT Industry Analysis

March, 2013

India is the leading destination for information technology (IT) and information technology enabled services (ITeS) due it’s huge talent pool and cost advantage. The Indian IT & ITeS sector is expected to grow from US$ 101 billion in FY12 to US$ 225 billion in FY20. As a proportion of India's GDP, the contribution of IT sector has risen to 7.5 per cent in FY12 from 1.2 per cent in FY98.

Total exports from the IT-business process outsourcing (BPO) sector (excluding hardware) stood at US$ 69 billion during the year 2012. IT services' exports has been the major contributor to India's total exports with over 58 per cent of the total IT exports during 2011.

Global In-House Centres (GIC), also known as captive centres, are one of the major growth drivers of IT-BPO sector in the country. Availability of skilled talent has been a major reason behind India's emergence as global outsourcing hub. Growth in offshoring is also expected to outclass the growth in overall IT spend across the various verticals.

Demand from emerging countries is expected to show strong growth going forward. Tax holidays are also extended to IT sector for software technology parks of India (STPI) and special economic zones (SEZs). Further, the country is providing procedural ease and single window clearance for setting up facilities.

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