Market Study

ICT Sector India.

Edition October 2011.
osec.ch



































Cover picture

UB City, Bengaluru - the IT hub of India
Title Market Study ICT Sector India.

Language

English

Number of pages

Author

82

Ms. Purnima Khandelwal, Director
InI Consulting Pvt Ltd
400072 Mumbai / Maharashtra
India
http://www.iniconsulting.in

Pulisher Swiss Business Hub India
Osec Zurich
Contact: Alberto Silini, +41 44 365 5151, exporthelp@osec.ch

Edition October 2011

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| 1
Content.
EXECUTIVE SUMMARY 2
SECTION I: OVERVIEW
1.1. India 4
1.2. ICT in India 5
1.3. Indian IT-ITES, BPO 6
1.4. Electronics Hardware 9
1.5. Telecom 10
1.6. ICT Research & Development 11
1.7. ICT Penetration and Scope in India 12
1.8. ICT Clusters in India 13
1.9. Growth Potential & Growth Drivers
for ICT in India 14
1.10. Government Policies and Initiatives 15
1.11. Technology and Business priorities
for ICT in India 16
1.12. ICT- Emerging Technologies 17
1.12.1. Cloud Computing 18
1.12.2. Business Intelligence 19
1.12.3. Mobility 20
1.12.4. Social Media 21
1.13. Opportunities in Indian ICT Sector:
Macro Outlook 22
SECTION II: SUB-SECTOR PROFILES 24
2.1. Health Care 23
2.2. Animation and Gaming 26
2.2.1. Animation 27
2.2.2. Gaming 28
2.3. Education 29
2.4. Manufacturing 34
2.5. Telecom 36
2.6. Finance, Banking and Insurance 41
2.7. Security 44
2.7.1. Electronic Security and Surveillance 45
2.7.2. IT Security Solutions 46
2.8. Others 49
2.8.1. E-Commerce 49
2.8.2. E-Governance 51
2.8.3. Agriculture 53
2.8.4. Bio-informatics 54
SECTION III: OPPORTUNITIES FOR SWISS SMEs
3. Opportunities for Swiss SMEs 55
SECTION IV: ACCESSING INDIAN MARKET 58
4.1. Investment Environment 58
4.2. Key Issues and Requirements 60
SECTION V: CONCLUSIONS
5. Conclusions 62
SECTION VI: Annexure & References 64
6.1. Network Readiness Index for India 64
6.2. Country Data 66
6.3. Demographic Trends 67
6.4. Key Macro-level Risks 68
6.5. Major challenges and concerns for
ICT in FI are: 69
6.6. E-governance projects initiated by
government of India 70
6.7. Fairs and Events 71
6.8. Regulatory and Trade Bodies 72
6.9. Abbreviations 75
7. List of Tables 80
8. List of Figures 81

2 |
The Indian economy has grown at 7.5-8% per annum in recent
years and is expected to grow by 8-9% in 2011. Indias economy
has been fuelled by the growth in the technology sector in last
two decades. A large part of this growth has been dependent on
the outsourcing or off shoring of key business processes and
software development (and related services) including system
integration, IT consulting, application management, custom
applications, infrastructure management, software testing and
web development by large global corporations and governments.
Transformation and growth of the economy has created
opportunities not only in exporting software and services
but increasingly in the domestic market also. The sector has
contr|buted to better governance and effc|ency and acted as a
catalyst for growth of various sectors across the Indian economy.
Switzerland also has strong ICT capabilities and offers ICT
organizations multilingual, highly trained personnel with extensive
experience in software development, telecom, Internet, logistics
and industrial applications. Many IT specialists are employed
in sectors such as banking, education, healthcare, logistics
and transportation, automation and consulting. However, it
is estimated that Switzerland would face a shortfall of 32,000
sk|||ed workers |n the fe|d by 2017
1
.
Indias rapidly growing ICT sector presents a potentially lucrative
market for Swiss SMEs. The Swiss ICT trade stood at USD
540 mn in 2010 which is a small percentage of the USD 73 bn
business conducted by the Indian ICT sector worldwide in 2010
1
.
During the same year, Indias exports of software and IT-enabled
services to Switzerland rose to USD 450 mn from level of 350 to
375 mn recorded |n the prev|ous fnanc|a| year. Wh||e the Sw|ss
market is dominated by highly specialized niche operators, it is
felt that there exists opportunities for SMEs from both countries
to interact and match their competencies and create a platform
to cater to the existing requirements of Swiss industry and tap
the Indian emerging opportunities.
Some of the Swiss ICT organisations with operations in India are:
NAME OF COMPANY SECTORS ORIGIN
ADASOFT AG Software Development / IT Solutions Switzerland
PIT Solutions GmbH Software Development / IT Solutions Switzerland
Schmid Telecom AG Telecom Switzerland
Swiss Re Business Process Outsourcing Switzerland
Omnisec AG ICT Solution Switzerland
ITPC AG SAP Consulting Switzerland
Swissnex India R&D Centre Switzerland
Some of Indian ICT organisations with operations in Switzerland are:
NAME OF COMPANY SECTORS ORIGIN
Sydaap Technologies Pvt. Ltd Hardware and Softwares India
Astra Infotech Pvt Ltd Software India
Aztec Software & Technology Services Ltd Software India
Triumph India Software Services Pvt. Ltd. Software India
Tata Consultancy Services Switzerland Ltd IT Solutions India
Wipro Technologies Ltd IT Solutions India
Hinditron Group of Companies Information Technology solutions, Hardware India
MindTree IT Solutions, BPO India
Executive Summary
1
Swiss info.ch- June 8, 2011
| 3
Ramco Systems Software Products and Services India
Infosys IT Solutions, BPO India
Ramsoft Technologies Software Development India
Patni Computer Systems IT Solutions India
HCL Technologies IT Solutions, BPO India
Mahindra Systems IT Solutions, BPO India
Evalueserve Knowledge Process Outsourcing India
This report provides a synopsis of the Indian ICT industry,
its constituents, growth drivers, factors driving its global
competitiveness, key technology trends, standards and labels
and the challenges/bottlenecks. It details out the opportunities
offered by the various sectors of the Indian economy and also
brings out the key issues and challenges that Swiss SMEs need
to overcome to make their India Business a success.
The Overview section provides the background information
about the Indian economy, the impact of ICT on Indian economy
and the key constituents of ICT industry viz. IT and ITES
sectors, BPO, hardware and Research & Development. It also
provides an overview of government policies, sectoral priorities,
technological imperatives, key geographical clusters, key growth
drivers and brief analysis of emerging technologies like Social
Media, Mobility, Business Intelligence and Cloud Computing.
Based on the growth potential and the capability of Swiss SMEs,
following sectors were shortlisted and detailed out in the report:
For each of these sectors, the report covers the status of industry,
key ICT applications, opportunities and challenges.
Finally a summary of the opportunities in each of these sectors
have been provided for Swiss SME as well as important issues
to access the lnd|an market have been |dent|fed |nc|ud|ng a br|ef
background of government policies (FDI/ taxation/ incentives etc)
and practical business considerations.
lt |s ev|dent that s|gn|fcant opportun|ty ex|sts for Sw|ss SMEs
across various industry verticals both for utilizing Indias strength
in ICT sector to provide international products and services or
to tap the Indian domestic market. However, collaborations and
partnerships would be the key to handle the uniqueness and
complexities of Indian market arising out of its size, diversity,
culture, and business practices. Organizations would need to
have a long-term perspective. Execution capability, operational
effc|ency and pr|ce compet|t|veness wou|d dr|ve the success of
their business in India.
Healthcare Education Banking, Financial Services and Insurance
Manufacturing Telecom Security and Surveillance Solutions
Bio-informatics E-commerce Animation and Gaming
E-governance Agriculture

4 |
Country Facts
India is the second largest country in the world, with an estimated
population of more than 1.21 bn. The Indian economy is one of
the fastest growing economies and is the 9th largest in terms of
GDP. In terms of purchasing power parity, the Indian economy
ranks fourth in the world.
India is one of the fastest growing large economies, and the ICT
sector |s a s|gn|fcant contr|butor to th|s growth. The contr|but|on
of the Indian IT and ITeS segment to national GDP increased
from 1.2%
4
in 1997-98 to 5.8% in 2008-09, the Indian IT sector
is the major exporting sector and it employs more than 2 million
people.
lnd|an lOT frms are he|d |n h|gh repute wor|d-w|de, serv|ce
suppliers offer high quality products and services with state-of-
the-art technology and the sector is a beacon for the country.
SECTION I. Overview
1.1 India
ECONOMIC STRUCTURE
3
Main Economic Indicators
Real GDP growth (%) 8.5
a
Oonsumer pr|ce |nfat|on (average, %} 9.22
b
Current-account balance (USD billion) -26.91
Exchange rate (average, INR : USD) 48.32
c
Population 2011 (billion) 1.21
External debt (Year-end; USD billion) 238
d
a
2010-11
b
July 2011
c
Calendar Year 2010
d
December Year 2010
2
OECD Forecast
3
Government of India Economic Survey 2009-10, www.forecast-chart.com, www.x-rates.com OECD (2009), OECD Economic Outlook, Number 85, June, OECD (2010b),
OECD Economic Outlook, Number 87, May, OECD (2010a), OECD Information Technology Outlook 2010.
4
RBI Deputy Governor Speech
The per cap|ta |ncome of lnd|a |s SD 4542 |n terms of
Purchasing Power Parity.
The lnd|an economy |s est|mated to grow by 8. 5% |n 2010-11
and is expected to grow at steady rate of 8-8.5% till 20152.
| 5
ICT refers to an expanding assembly of technologies that are
used to handle information and aid communication. These include
hardware, software, media for collection, storage, processing,
transmission and presentation of information in any format (i.e.,
voice, data, text and image), computers, the Internet, CD-ROMs,
email, telephone, radio, television, video, digital cameras etc.
The Indian ICT sector has evolved in three phases: 1947-
1984, 1984-1990 and post-1990. ln the frst phase, under
the closed economy, the state tried to run the industry which
led to miniscule development in commercial sector. No great
differentiation between software and hardware was seen in
this phase. During the period 1984 and 1990, the government
realized that software was a viable option for income generation
and technological capability enhancement. Post 1991 after the
opening of the economy, the software export industry grew
tremendously and was promoted by both national and regional
governments. However, the export-driven growth model ignored
the hardware sector and domest|c sector, desp|te |ts s|gn|fcant
potential.
The ICT sector has been categorized as:
lT-lTES, BPO
E|ectron|c Hardware
Te|ecommun|cat|on
Over the last decade, India has entered in to a global leadership
position by transforming a USD 3.5 bn
5
sunrise industry into
a USD 63 bn global IT-ITES-BPO powerhouse. Electronics
Hardware has grown and doub|ed |n |ast fve years.
As per NASSCOM, the Indian ICT industry contributes
about 6.1% to the national GDP, which is about 5 times of its
contribution about 10yrs ago. The export driven Software and
Services Industry continues to contribute most to the growth
of the sector. The Indian ICT sector is dominated by the larger
p|ayers w|th the top 200 frms contr|but|ng over 85% of the tota|
revenues.
While the ICT sector has been is growing in all domains, the
growth in the sector is predominantly driven by software services
and telecom services.
1.2 ICT India
5
Nasscom Report
0
5
10
15
20
25
30
35
TOTA|: 73.1
2009-10 2008-09 2007-08 2006-07 2005-06 2004-05
69.4 62.9 42.0 37.4
lT Serv|ces
28.2
lTes BPO
Software Products & Eng|neer|ng Serv|ces
Hardware
ICT, which broadly comprises Information Technology &
Oommun|cat|ons, can be c|ass|fed |n to the fo||ow|ng sectors:
- IT, ITES BPO (Software)
- Electronic Hardware
- Telecommunications
Figure 1: Indian IT sector Revenues

6 |
lnd|a`s success |n the fe|d of |nformat|on techno|ogy |ed bus|ness
process outsourcing over the past decade remains unparalleled.
India is currently regarded as the premier destination for the
global sourcing of IT, ITES & Business Process Outsourcing and
these sectors have seen tremendous growth in the past decade.
It is estimated that India has:
62% share of SD 58 bn
6
global technology services market
(IT Services, Engineering Services and R&D)
32% share of SD 37 bn
6
Global Business Outsourcing Market

1.3. INDIAN IT-ITES, BPO
Total export revenues earned by ITES-BPO sector have grown from
USD 1.8 bn in 1997-98 to USD 49.7 bn in 2009-10, a CAGR of 35
%. The domestic IT-BPO sector is showing increased traction, too,
with growth from USD 1.4 bn in 1997-98 to USD 14 bn in 2009-10,
a CAGR of 22%6
FY-05 FY-06 FY-07 FY-08 FY-09 FY-10
lT Serv|ces
lTes BPO
Software Products & Eng|neer|ng Serv|ces
Hardware
0
5
10
15
20
25
30
0.5 0.6 0.5 0.5 0.4 0.4
0
2
4
6
8
10
12
FY-05 FY-06 FY-07 FY-08 FY-09 FY-10
(Value in USD Billions)
SERVICE LINES
6
FY08 FY09 FY19
IT Services 22.2 25.8 27.3
BPO 9.9 11.7 12.4
Software products/
Engineering
8.3 9.6 10
Total 40.4 47.1 49.7
(Value in USD Billions)
SERVICE LINES
6
FY08 FY09 FY19
IT Services 7.9 8.3 8.9
BPO 1.6 1.9 2.3
Software products/
Engineering
2.2 2.7 2.8
Total 11.7 12.9 14
Figure 2: Indian IT Sector Export Revenue
Figure 3: Indian IT Market Domestic Market Revenue6
lT Serv|ces lTes BPO
Software Products & Eng|neer|ng Serv|ces
Hardware
lT Serv|ces lTes BPO
Software Products & Eng|neer|ng Serv|ces
Hardware
6
CII-PwC Report Changing Landscapes and emerging Trends, Indian IT, ITeS Industry
| 7
Key Markets
USA with 60% share remains the largest export market for
Indian IT-BPO services, incremental growth is being driven by
the European market, with UK and Continental Europe and with
grow|ng contr|but|ons from markets across the As|a Pac|fc.
Over 600 Multinational Companies have been sourcing product
development and engineering services from their centers in India.
Composition of Industry Verticals in Exports
Major Export Destinations (share in %)
Market Structure: The Indian IT- BPO industry has organisations ranging from large Indian and multinational corporations to
start-up and emerging companies.
Banking, Financial Services and Insurance (BFSI) remains the
largest vertical sector in the IT-ITeS and BPO domain accounting
for over 40% of the Indian IT-ITeS exports in year 2009-10. Verticals
like Hi-tech /Telecom, Manufacturing and Retail are increasingly
gaining share.
TYPES OF FIRMS NO. OF FIRMS EMPLOYEES MAJOR PLAYERS
Large-sized players Seven, each with revenues
more than USD 1 billion
40,000 and above lnd|an, Mu|t|nat|ona| frms
Mid-size players 75-80, each with revenues in
the range of USD 100 million
- 1 billion
5000-40,000 Mu|t|nat|ona| frms
Emerging players 300-350, each with revenues
of USD 10-100 million
100-5000 lnd|an frms that are capt|ve centres of
multinationals
Small/ Start-ups More than 3500, each with
revenue less than USD 10
million
less than 73 lnd|an frms
Table 1: Structure of Indian IT-BPO Industry
Figure 4: Composition of Industry Verticals in IT Exports Figure 5: Major IT Export Destination
41%
20%
17%
22%
Bank|ng. F|nanc|a| Serv|ces & lnsurance
H|-Tech / Te|ecom Manufactur|ng Others
60%
32%
8%
n|ted States Europe Others

8 |
While India holds a dominant share of the global offshore IT-
BPO sector, yet, at USD 49.7 bn in 2009-10, Indian IT-BPO
exports account for less than 3 percent of the global spend on
IT-BPO. There is tremendous possibility for growth in future. Over
the next decade, the |ndustry |s expected to be |nfuenced by
several global macro-economic, demographics, social, business
and technological trends that would shape the face of global
business.
Key Growth Drivers
The key factors that are driving the growth of the IT-BPO industry in India are:
GLOBAL MEGATRENDS IMPLICATIONS FOR INDIA
Macro-economic lnd|a`s share of g|oba| GDP |s ||ke|y to r|se from 2.1 % |n 2008 to 3.3 % |n 2020
Per Oap|ta |ncome of lnd|ans has doub|ed over the |ast 10 years
Social and Environmental Te|edens|ty |ncreased over 12-fo|d over the |ast 10 years from |ess than 2% |n 1998 to around
24% by Dec 2007; likely to increase to 62% by 2013
lnternet connect|v|ty |s a|so ||ke|y to |ncrease w|th ava||ab|||ty of spectrum for 3G and W|Max
Business and Technology lncreased use of techno|ogy and BPO outsourc|ng |n lnd|an compan|es
Emergence of |nnovat|ve bus|ness and serv|ce de||very mode|s (eg. SaaS, c|oud comput|ng}
lncreased |nvestment |n techno|ogy and BPO by centra| and state governments
Table 2: Key Trends for Growth of IT-BPO Industry in India
Given the backdrop of large untapped demand potential and
strong fundamentals, India is uniquely positioned to secure global
leadership, grow its IT-BPO exports at an annual rate greater than
13 percent, and generate export revenues of USD 82 bn, and
domestic revenues of USD 23 bn by 2014
7
.
7
Nasscom-Mckinsey Perspective 2020
| 9
The electronics industry includes semiconductor design, high-
tech manufacturing, electronic components, EMS, and electronic
systems design for consumer electronic products, telecom
products and equipments, and IT systems and hardware.
The revenue from Indian IT hardware segment increased from
USD 8.5 bn in 2006-07 to USD 9.4 bn in 2009-10.
Growth Potential & Growth Drivers
for Electronic Hardware
The demand for electronics hardware is being fuelled by the
relatively high growth rate of the Indian economy coupled with the
large middle class in India with increasing disposable incomes.
Supply is not keeping pace with demand in India, resulting in
ever-increasing imports from China, Taiwan, South Korea etc.
India is gradually building a hardware manufacturing base but the
electronic hardware industry in India is still orientated towards the
domestic market. The market is fragmented, lacks a component
base and has |nfrastructura| barr|ers w|th h|gh cost of fnance
and high technological obsolescence. The electronics hardware
industry is highly import-dependent. Given that consumption is
|ncreas|ng rap|d|y, the trade defc|t |s set to acce|erate.
1.4 Electronics Hardware
Following table shows the breakup across the electronics hardware industry and their growth rates:
ELECTRONICS HARDWARE SUB-SECTORS KEY SEGMENTS CAGR
Industrial Electronics Products for various Sectors e.g. Energy, Transportation,
Automation Systems etc.
11.6%
Computers PCs & IT Products 10.5%
Communication & Broadcast Equipment DTH, Communication Equipments, Broadband etc 53.7%
Strategic Electronics Satellite based, surveillancesystem, internal security
system and defense, aerospace and nuclear Sectors
22.7%
Components Electronics Components for mobile, CRT TVs etc. 9.0%
Table 3: Electronic Hardware Industry CAGR
8
At the current pace, the demand supply gap is projected to
increase from USD 25 bn in 2009 to USD 298 bn in 2020
9
.
0
50
100
150
200
250
300
350
400
22%
FY-09 FY-14 FY-20
31%
FY-09 FY-14 FY-20
0
10
20
30
40
50
60
70
80
FY-09 FY-14 FY-20
0
50
100
150
200
250
300
350
400
Expected Domestic Demand for Electronics in India
Projected demand-supply gap in Electronic Industry
Expected Export of Electronics in India
Figure 6: Demand Supply Gap and Projected Growth of
Electronics Industry
Source: Industry
Estimates
Source: Industry Estimates Tota| Demand
Domest|c Product|on (target}
Domest|c Product|on (at current OAGR}}
The electronics industry has the potential to leapfrog India to
next generation of technology adoption and holds immense
transformational potential for various industry verticals.
8
Annual Report 2009-10 Ministry of Communications & Information Technology, India
9
Task Force Report Dec 2009-Ministry of Communications & Information
Technology, India

10 |
India is the worlds second-largest telecom market. The total
subscriber base (including wire-line and wireless) reached
787.28 million
10
in December 2010. The wireless segment has
been registering monthly mobile additions of about 15 to 20
million subscribers.
11

The wireless subscriber base in India grew from FY00 through
FY10 at a compound annual growth rate (CAGR) of 77.5% to
reach 584.3 million subscribers in FY10
11
. This number reached
752.19 million subscribers December 2010.
10
From FY05 through FY10, the number of internet and broadband
subscribers has increased at a CAGR of 23.9% and 117.5% to
reach 16.2 mn and 8.8 mn11 respectively in FY10.
The te|ecom market can be broad|y c|ass|fed as:
W|re|ess
|and||ne (or W|re||ne}
lnternet and Broadband
va|ue-added Serv|ces (vAS}
l|D/N|D: Enterpr|se data
Te|ecom equ|pment and |nfrastructure
1.5. TELECOM
In FY10 telecom sector has been the major contributor to the
services sector contributing nearly 3.6% of the total GDP.
Figure 7: Gross Revenue Indian Telecom Sector
FY-00 FY-01 FY-02 FY-03 FY-04 FY-05 FY-06 FY-07 FY-08 FY-09 FY-10
0
5
10
15
20
25
30
35
Gross Revenue - Indian Telecom Sector
10
TRAI Press Release February 2011 nnual Report 2009-10 Ministry of Communications & Information Technology, India
11
EnY and FICCI Report 2011
| 11
The entry of R&D centers into India started in the mid-1980s
but |t ga|ned momentum on|y |n the m|d-2000s after lnd|an frms
successfully demonstrated that they could deliver large software
projects. Over 600 Multinational Companies have been sourcing
product development and engineering services from their centers
in India.
Mu|t|nat|ona| frms dom|nate |n the |nnovat|on space through
the|r lnd|an R&D centers. Most of the mu|t|nat|ona| frms fo||ow
the conventional outsourcing model: they enter India as a cost
centre which then evolves into a technology centre.
Large domestic players also provide engineering services and
R&D and software products wherein they undertake product
development activities performed for external clients. These
services contributed USD 8.6 bn and constituted around 13% of
total industry revenues in 2008. Over 74% of engineering services
and R&D and software products revenue is from exports
12
.
The R&D centers run by MNCs are categorized as:
1. Centre for Global-Cater to the requirements of the
global market.
2. Local for Locals- Adapt their product to local needs like
developing software in Indian languages or providing services
to telecom players to exploit the Indian market by product
adaptations to meet local needs in India.
3. Local for Global- Established as part of a strategic decision
and complement the global technology development effort of
the MNCs. These centers work on mainstream research by
the parent frms.
1.6. ICT Research & Development
12
Trends in Public and Private Investments in ICT R&D in India by JRC-IPTS, 2011
SOME OF THE NOTED R&D ORGANIZATIONS ARE:
a. Centre for Development of Advanced Computing (C-DAC) of
the Department of IT & Communications which carries out
R&D in IT, Electronics and associated areas
b. Med|a |ab As|a, a not-for-proft company of the Department
is innovating for digital inclusion with an aim to bring the
benefts of lOT to da||y ||ves of common man.
c. C-MET, IITs, IISc, CSIR labs, IIITs, CEERI-Pilani, Jadavpur
University Kolkata, Anna University-Chennai are some of
the prominent academic and research institutions taking up
R&D work in ICT sector in India
THE R&D CENTERS OF IT MNES HAVE THE
FOLLOWING SPLIT:
50% serv|ng as center-for-g|oba|
46% as |oca|-for-g|oba|
4%12, are estab||shed as |oca|-for-|oca|s
S frms dom|nate the lnd|an lOT R&D space. lnvestment from
European Union countries is very limited.

12 |
1.7. ICT Penetration & Scope in India
Networked Readiness Index (NRI) is an index designed by the
World Economic Forum which measures the propensity for countries
to exploit the opportunities offered by information and communications
technology. The NRI is a composite of three components in which the
individual countries are ranked upon:
The overa|| env|ronment sub-|ndex for lOT and |nnovat|on offered
by a country includes market conditions, regulatory framework and
infrastructure (both human and physical). India has a score of 3.9
in this sub-index with an overall rank of 58.
The read|ness sub-|ndex of the country`s key stakeho|ders
(individuals, businesses, and governments) which gauge the
preparation and willingness of the three stakeholders to adapt and
use ICT in their day-to-day activities. India scores 4.8 in this sub-
index with a World rank of 33.
The extent of usage of lOT sub-|ndex refects the penetrat|on/
usage of ICT amongst the economys chief stakeholders. This sub-
index progressively evolves towards capturing ICT impact in terms
of inclusive society, business innovation, and better governance.
India scores 3.3 in this sub-index ranking 67th in the world.
The overall NRI of India in 2010-11 is 4.0 and India is ranked 48
among 138 countries.
Following three parameters indicate ICT penetration in India:
1. PC Penetration
13
- PC penetration in India was at 4% of its
population in 2009, compared with 20% in China, 89% in the
US and 98% in Japan. Low PC penetration is primarily due
to the issue of affordability.
2. Internet Penetration- India has low Internet penetration at
less than 7% of its population. However, this is expected to
change due to its fast-growing telecom industry. By the end
of 2010, there were only 80 million Internet users and 11
million broadband users in the country. Low penetration of
PC in India is a huge barrier to Internet penetration.
3. Mobile Penetration- Mobile phone penetration stood at 63%
with 752 million subscribers in December, 2010 according
to the Telecom Regulatory Authority of India. About 15%
of Internet users in India access the Web through their mobile
handsetsa trend likely to pick up with the increased take-
off in smartphones and the advent of 3G.
It is estimated that every 10% increase in mobile penetration
contributes as much as 0.6% to the countrys gross domestic
product; an increase in Internet penetration makes a bigger
contribution. India is rated 4.0 in the Network Readiness Index
(NRI) by world economic forum and is ranked 48th among 138
countries.
13
Citi Investment Research and Analysis September 2010 report
| 13
The growth of the lnd|an lOT sector has been across d|fferent c|t|es of the country but concentrated |n spec|fc reg|ons.
The table below details out the different clusters:
DIMENSION BANGALORE DELHI NCR CHENNAI HYDERABAD PUNE MUMBAI
CLUSTER
DENSITY
Dense Dense Dense Dense Dense Dense
CLUSTER
BREADTH
Broad (potential
for ICT, Bio-IT)
Broad
Broad (potential
for ICT)
Broad (potential
for ICT)
Broad (potential for
ICT, Bio-IT)
Broad
ACTIVITY
BASE
Activity-rich along
the value chain
in IT services,
software, ITeS-
BPO, R&D,
hardware
Activity-rich
along the value
chain: BPO,
IT services,
software, R&D,
hardware
Activity rich,
strong application
and system
software, strong
hardware, ITeS-
BPO
Activity-rich
along the
value chain in
IT services,
software, ITeS,
strong in chips
Very active in product
development, R&D
intellectual proeperty
hub, IT services
presence
Activity- tich
along the
calue chain
in IT services,
software, ITeS
hardware
ANCHOR
COMAPANY
COMPUTER
HARDWARE
Solectron
(personal Internet
device for AMD)
MRO-Tek 2
(manufacturing
plants for
network/telecom)
Flextronics (set
top boxes for
Glalxis)
Sahara
(Computer, PC
and peripherals)
Samsung
(monitors)
Wipro (PC and
laptops), IMP/
Lenovo (Pc and
laptops), TVSE
(printers and
peripherals)
Semicom
and AMD
(projects for
semi-condictor
manufacturing)
Not Available
Kobian
(motherboards
and graphics
boards) PCS
(PC and
laptops)
ANCHOR
COMPANY IT
SERVICES,
SOFTWARE
AND R&D,
ITES-BPO
Infosys (HQ),
Wipro (HQ), Digital
Gloabal Soft (HQ)
HCL (HQ),
Hughes (HQ),
Genpact,
Samsung
Polaris (HQ), NIIT
(training HQ)
Mahindra
Satyam (HQ)
Compulink systems
Pvt LTd (HQ), centres
of Infosys, TCS, WNS,
Honeywell etc
TCS (HQ),
iGate-Patni
(HQ), Tata
Infotechltd,
Sglobal Tele-
system
INNOVATIVE
CAPACITY
High High High High High High
OWNERSHIP
STRUCTURE
Combination of
foreign-owned
and locally owned
frms
S|gn|fcant
share of local
small and
medium-sixed
enterprixes,
presence of
mulitnational
and Indian top
companies
Combination of
foreign-owned
and locally owned
frms
Combination of
foreign-owned
and locally
owned frms
S|gn|fcant share
of local small and
medium-sixed
enterprixes, presence
of mulitnational and
Indian top companies
Combination of
foreign-owned
and locally
owned frms
Table 4: Domestic ICT Clusters
1.8. ICT Clusters in India

14 |
The key driving factors for Indias growth in ICT are cost effectiveness, quality assurance, supply of technical graduates, availability of an
adequate telecommunication infrastructure and a favorable time zone relative to the United States and Europe.
The spec|fc trends po|nt|ng to growth of lOT are:
TRENDS IMPLICATIONS
Macroeconomic and
demographic trends
Shifting centers of economic activityGDP of Asia and Europe will converge working age population
shrinking in key developed countries (e.g., Japan, Italy, US).
Social and environmental
trends
Increased Internet and mobile connectivity would transform the way people live and interact.
Business and technology
trends
Technology has been radically transforming the way traditional corporations and governments
function. This will lead to new opportunities, in addition to the key focus areas, which has
been largely untapped so far. While the core market for BFSI, telecom, retail, pharmaceuticals,
manufacturing and travel will continue to grow over the next 10 to 15 years, driven by growth in the
cost base, the |ndustry w||| be redefned a|ong four key d|mens|ons.
New services in core
markets
Beyond the cost-based growth there is still further growth potential in the core markets described
above. Going forward, the industry can propose additional services to these core markets in
three ways:
- offer beyond-cost services, e.g., revenue enhancement, capital avoidance;
- suggest integrated manufacturing and services solutions e.g., end-to-end development of new
auto parts; and
- redesign and transform processes, leveraging automation
New verticals Several verticals in developed countries, which have previously not globally sourced services, are
expected to do so in the next wave of growth. Driven by the megatrends, at least four new verticals
are expected to emerge by 2020 (public sector, healthcare providers, media and utilities). For
example, due to increased spending requirements on healthcare and pensions as a result of aging
populations, the public sector and healthcare providers will increasingly depend on technology and
services providers for solutions to reduce the cost to serve. Also, energy companies and utilities will
look for solutions to monitor and optimize their carbon footprint in line with emission requirements.
New customer segments Enabled by mega trends such as increased digital connectivity and the availability of new delivery
p|atforms, the |ndustry can expand |ts |nfuence beyond |arge enterpr|ses to SMEs. The emergence
of new service offerings and business models (such as SaaS) will also allow players to serve smaller
enterpr|ses |n an unconvent|ona| but proftab|e manner. The |ndustry can a|so offer d|rect bus|ness-
to-consumer serv|ces (such as fnanc|a|, hea|thcare and trave| serv|ces} to the emerg|ng c|ass of
well-connected retail consumers.
New geographies As economic growth expands into new markets, Asia will bypass Europe as the second largest
target market, led by India and China. On the back of greater adoption of technology and
outsourcing by enterprises, BRIC markets will become a sizeable target domestic outsourcing
market, with India and China accounting for almost 50 per cent of the opportunity.
7ao|e 5: Soec|hc t|ends oo|nt|ng to g|owt| of /C7
1.9. Growth Potential & Growth Drivers for ICT in India
| 15
1.10 Government Policies & Initiatives
By encouraging foreign participation in most sectors of the
economy, policy makers in India have placed special emphasis
on |ts |mportance as both a source of fnance and a fac|||tator of
knowledge and technology transfer. Few of the noted initiatives
by the government are:
Oopyr|ght protect|on and cyber |aws were |nc|uded |n the
comprehensive Information Technology (IT) Act introduced
in 2000
Oreat|on of software parks, Spec|a| Econom|c Zones (SEZs}
and knowledge sector industrial estates with relaxed
regulatory and tax structures
lntroduct|on of lnformat|on Techno|ogy lnvestment Reg|ons
(ITIRs) schemes in 2008 under which each state in India
can set up an integrated township for facilitating growth of IT /
BPO, with provision of world-class infrastructure, supported
by investor-friendly policies.
14

STPs Business parks which are aimed at providing favourable
business climates for software exports. The major features of STPs
are:
- Immediate approvals
- 100% Foreign Equity
- Imports of Hardware & Software are duty free
- Exempted from payment of corporate income tax for
a duration
Such STPs contribute more than 70% of the revenue to the
industry.
14
Ministry of Communications and Information Technology (2010), http://www.mit.gov.in/content/einfrastructure-0

16 |
1.11. Technology & Business Priorities for ICT in India
Growth of Indian IT sector has been possible due to the quality
assurance prov|ded by the frms through g|oba||y recogn|zed
qua||ty cert|fcates ||ke the capab|||ty matur|ty mode| (OMM}
and ISO series. The transition from onsite to offshore shows
the evo|v|ng project management capab|||t|es of lnd|an frms.
An increasing number of IT-BPO companies continue to adopt
global standards such as ISO 9001 (for Quality Management)
and ISO27000 (for Information Security). India-based centers
(both lnd|an frms as we|| as MNO-owned capt|ves} account
for the |argest number of qua||ty cert|fcat|ons ach|eved by any
s|ng|e country. Oert|fcat|ons ||ke the lSO (lnternat|ona| Standards
Organization) and CMMi (Capability Maturity Model Integration),
TQM, 6 Sigma Quality (for defect and cycle time reduction),
eSCM (for continuous quality process enhancement), COPC,
P-CMM (People Capability Maturity Model), etc., are some of the
most sought after qua||ty cert|fcat|ons |n the lT-lTES sector. 58
out of 198 OMM12 cert|fed frms are |ocated |n lnd|a.
Fo||ow|ng have been |dent|fed as the top 10 pr|or|t|es for lnd|a on the Bus|ness and Techno|ogy front |n the lOT sector:
TOP 10 BUSINESS PRIORITIES RANKING TOP 10 TECHNOLOGY PRIORITIES RANKING
Increasing enterprise growth 1 Cloud computing 1
Improving business continuity, risk and security 2 Mobile technologies 2
Reducing enterprise costs 3 Virtualization 3
Implementing and updating business applications 4 Enterprise resource planning (ERP) 4
Increased use of information/ analytics 5 Enterprise applications 5
Attracting a retaining new customers 6 Business Process Management (BPM) 6
Improving technical infrastructure 7 IT Management 7
Improving business processes 8 Networking, voice and data communications 8
Greater control and management of technology 9 Business intelligence (BI) 9
Expanding into new markets and geographies 10 Analytics 10
Table 6: Top 10 Business and Technology Trends for ICT in India
15
15
Gartner 2011
17 |

The world economy is now characterized by sluggish growth in the West, a shift in power to the East, and value-driven customers and
rising risks everywhere. At the same time, the downturn has hastened the adoption of key technologiescloud computing, business
intelligence, mobility and social mediathat are transforming businesses and sparking a new wave of wealth creation, particularly
in the emerging world.
1.12. ICT - Emerging Technologies
| 18
1.12.1. Cloud Computing
Cloud Computing is a concept newly developed in the IT
domain and is growing at a very fast pace across the world.
Th|s techno|ogy a||ows for much more effc|ent comput|ng by
centralizing storage, memory, processing and bandwidth. Under
the cloud computing concept, services can be availed under
three categories:
1. Software as a Service (SaaS)
2. Platform as a Service (PaaS)
3. Infrastructure as a Service (IaaS)
It is estimated that the cloud computing market in India stands
at USD 110 mn in 2010 with software-as-a-service (SaaS)
accounting for USD 50 mn of revenue. The total market is
expected to reach USD 1084 mn by 2015. As components of
the overall cloud market, software-as-a-service (SaaS) is likely
to reach a mark of USD650 mn by 2015, while platform-as-a-
service (PaaS) and infrastructure-as-a-service (IaaS) markets
cumulatively would touch USD 434 mn each by 2015.
16
The total cloud market is less than 0.5% of the total domestic IT
spending which is expected to increase to around 5% of the total
domestic IT spending.
17
Spend on us|ng c|oud by |nformat|on techno|ogy and back offce
frms, te|ecos, BFSl (bank|ng, fnanc|a| serv|ces and |nsurance},
manufacturing and government organisations is set to increase
to 8.2 percent over the next fve years from 1.4 percent |n 2010.
17
In India following trends are observed:
Government manufactur|ng and energy are fastest
growing verticals and have huge potential for cloud computing
BFSl and te|ecom are most matured lT w|se and have
high propensity towards adoption of cloud
Growth Drivers
Cost of solution and brand of the technology provider are key
parameters used for evaluation during the decision making
process. The major demand drivers are:
Pay per use mode| c|oud so|ut|ons he|p |n decreas|ng the
upfront cost for procuring IT
There |s no cost assoc|ated w|th upgrades and ma|ntenance
Prov|des a better case for |nformat|on fow w|th|n
the organization
n|form|ty of process across the organ|sat|ons
Email, ERP and CRM are poised to be the top 3 workloads to
move to O|oud by 2015. Other |dent|fed serv|ces are; storage,
security and collaboration suites.
Challenges
The major challenges that the cloud companies have to face in
India are around data security and reliability, lack of customization,
lack of training and support and poor market reach.
Zoho a S based frm has been prov|d|ng c|oud comput|ng
serv|ces to lnd|an compan|es spec|fca||y |n ORM and Bus|ness
suite services.
Zoho app||cat|ons are free to use at the entry-|eve| and requ|re a fee
for more extensive or professional use.
16
CIOL News 2010
17
Adapted from Zinnov Study
19 |
India is the fastest growing Business Intelligence (BI) Platforms
market in Asia. The market for business intelligence (BI) software
in India is forecast to reach revenue of USD 65.4 mn in FY12, up
15.7 percent over 2010, according to Gartner, Inc. Organizations
are turn|ng to Bl as a v|ta| too| for smarter, more ag||e and effc|ent
business, and they increase the current usage scenario from just
an information delivery mechanism.
Currently the market for providing high-impact business solutions
is still very nascent and grossly under-exploited. In a booming
economy, business intelligence offers value over and above the
natural growth rate, and this is where a huge untapped market
lies in India.
Growth Drivers
Adopt|on of Bus|ness Ana|yt|cs so|ut|on by Sma|| and med|um
enterprise (SME)
Growth of sectors like Telecom- BFSI, Security, Heavy
Engineering and technology-intensive manufacturing industries
and e-Governance
lmp|ementat|on of soph|st|cated ana|yt|cs for understand|ng
customer churn and making credit risk assessments in BFSI
Standard|zat|on, Regu|atory Oomp||ance and enforcement of
new laws like the Right to Information Act
Oompan|es wh|ch have adopted so|ut|ons ||ke ERP, supp|y
chain management, or data warehouses, often face a
situation where they have a huge amount of data and
|nformat|on but no he|p|ng too| or c|ear|y defned map, wh|ch
can be put to use for making strategic decisions. This
growing segment would go towards BI to leverage data and
achieve further competitive advantage.
Challenges
Wh||e the market poses a huge opportun|ty, the |ack of a defn|t|on
or agreement of what and how to measure/analyze the business
will continue to inhibit successful deployments, discouraging
organizations from further investing in BI. Additionally, right
pricing, awareness and customization of BI Solutions especially
for SMEs would be key challenges for solution providers.
1.12.2. Business Intelligence
EARLY ADOPTERS OF BI
UB Group
UB Group, India decided deployed Business Intelligence tools from Microsoft for cost reduction initiatives within the organization.

HDFC Bank
HDFO Bank has used the Bl so|ut|ons from Reve|eus of |-fex to reduce costs by opt|m|z|ng |ts channe|s. lt has a|so he|ped |n
reduction of reaction time of the Bank to emerging market opportunities.
KEY PLAYERS
Microsoft, SAP, Oracle, SAS Institute and IBM are top players providing
Bl so|ut|ons. There are a|so |oca| frms a|ong w|th other fore|gn frms
providing BI solutions in India.

| 20
Enterprise mobility
18
is the biggest single trend across the tech
industry investment. The increasing importance of the space is
refected |n robust market tract|on pred|ct|ons for lnd|a as we||.
According to Frost & Sullivan, the enterprise mobility market in
India was worth USD 77 mn FY09
19
and is estimated to reach
USD 418 mn by FY16.
Enterprise mobility market in India is set to witness a major boom
in its adoption in the ensuing years. Rapid change in the business
models of organizations and demand to engage a better and
competent mobile workforce is primarily propelling adoption of
enterpr|se mob|||ty |n the market. The most s|gn|fcant bus|ness
application that is near ubiquitous in its mobility is email.
Adoption of enterprise mobility applications in the intra-enterprise
space is low but gaining momentum. India is still at a stage where
only a few sectors like retail and BFSI are using mobility apps for
conventional areas like sales force automation and transaction
management. Other early adopter market segments include
Pharma, Transportation and Logistics sectors.
Growth Drivers
Factors |nf|ct|ng growth |n the |ndustry |nc|ude abundant
presence of handheld devices- smartphones, continual
rep|acement of offce POs w|th |aptops/ Tab|ets, ro|| out of h|gh
speed connectivity (3G), low data access charges and declining
hardware prices.
Challenges
Major cha||enges, |dent|fed for the |ndustry, |nc|ude secur|ty
concerns, costs, Device compatibility, and limited ICT
infrastructures and digitization with Small Medium Enterprises in
lnd|a wh|ch |s a s|gn|fcant const|tuent of the overa|| market.
Creating localized enterprise solutions for businesses (that take
into account lower levels of digitization) as opposed to traditional
application would be the key to succeed in India.
1.12.3. Mobility
A PC Quest survey of over 70 IT decision makers from large Indian
companies noted that 46% of respondents had extended access
to email. Around 18% had also enabled access to CRM and ERP
on smartphones
Implementation of ICT-enabled mobility management systems in
2030 can offset emissions created by 12 million cars, travelling an
average of 18,000 km per annum which is equivalent to 16,500
million litres of diesel or 17,200 million litres of petrol saved.
20

Growth Path for Mobility
CHARACTERISTICS CURRENT FUTURE (2 TO 3 YEARS)
Build or buy Predominantly custom-built Predominantly packaged
Platform P|atform-spec|fc Platform-independent
Device form factors Smartphone, specialized devices, laptops Smartphone, tablets, new form factors
Application footprint Device-resident Browser based
Usage Scenarios Field and task workers Field, task, management, business
travellers, knowledge workers
Business process scope Sales and operations All corporate functions
Table 7: Growth Path for mobile enterprise applications, 2011
Field force automation,

Mobile transaction manage-
ment, Asset tracking and
management, bill payments
/ receipts, ticketing, MIS
CRM, Remote Data
Collection and
management, Queue Buster
Solutions, Location based
services
MOBILITY
PLATFORM
Figure 8: Applications that are being ported to
mobility platforms
18
Forrester
19
NASSCOM EMERGE Newsletter Feb 2011
20
CII-DESC Report on ICTs Contribution to Indias National Action Plan on Climate Change, 2010
21 |
Due to its direct reach to huge number of consumers, the social
media marketing has seen a tremendous growth in the recent
time with majority of companies adopting business models
around social media, using the platform to market events,
generate sales, introduce innovative concepts and even create
a new market for their brands online.
The estimated worldwide ad spends on social networks will be
in excess of USD 4 bn
21
in 2011 and the same will continue to
grow. It is well established that these networks are capable of
rewarding media companies with new avenues of revenue.
A survey by Nielsen found that 70% of social media users in India
accessed a social networking site every day. It was also found
that 89% of 15-20 year old users accessed a social networking
site every day and 60% of them spend at least half an hour on it
daily. It was found that 37% of heavy social media users in India
(who use it multiple times a day) fall in the age group of 21-30
years.
22
As around the world top sites for social media in India are:
Facebook, Orkut, Twitter, Blogger, Youtube and Wikipedia. There
are also some Indian sites but with relatively small user base but
are integrated strongly among the target audiences.
Social Media trends in India
The buy|ng trend: on||ne as we|| as off|ne |s on a r|se: a p|atform
for e-commerce
Deve|opment of soc|a| med|a too|s for |ocat|on wh|ch wou|d
|ead to |ocat|on spec|fc d|scounts and dea|s
The penetrat|on of soc|a| gam|ng |s on r|se. Brands are target|ng
it for the potential customer base
lncrease |n mob||e penetrat|on: |nc|us|on of the soc|a|
media apps
Too|s to capture and ana|yze the sh|ft |n the soc|a| med|a
marketing strategies
Emergence of the three k|nds of frms |n the doma|n of
soc|a| med|a: Techno|ogy Ana|yt|cs, Strategy Oonsu|t|ng frms,
Outsourc|ng frms

Opportunity
The growth in the amount of time spent on social networks by
users will steadily see an increase in the coming years as the
demograph|c prof|e of lnd|a changes. The average t|me spent
on such networks on a daily basis by an individual is now
calculated in hours as opposed to minutes as was done a few
years ago. A rough estimate of the increase in time spends on
social networks in 2010 over the corresponding year could be
anywhere in excess of 50%21. As fallout, constant and timely
innovation in products, systems, processes all software driven
w||| he|p create s|gn|fcant new opportun|t|es.
1.12.4. Social Media
21
Deloitte Report: Technology, Media & Telecommunications Predictions 2011
22
Federation of American Scientist (FAS) Report
TOP SECTORS WHICH ARE USING SOCIAL MEDIA IN
INDIA ARE:
- Job portals,
- Film Industry,
- Airlines,
- Telecom
- IT
- Retail (in the recent times)
With the emergence of e-commerce and e-governance, various
options of integrating them with the social media are also gaining
tremendous momentum.

| 22
As Indian consumers and corporations rapidly adopt mobile
phones, and Internet access and broadband connectivity
expand, there |s ||ke|y to be a s|gn|fcant |ncrease |n spend on lT
hardware, software and services. Finally, the biggest domestic
opportunity in most sectors (e.g., banking, insurance, retail,
telecom and healthcare) lies in tapping the opportunity to serve
the millions of underserved. India is likely to be the laboratory for
disruptive innovations to serve these underserved segments at a
pr|ce and performance prof|e that su|ts these cond|t|ons.
From a service line perspective, Indian domestic market is still
heavily dominated by voice-based services. Most of the BPO
work is around contact centre type of work catering to customer
care and sales/marketing services. This would comprise almost
65-70 percent of the market. This is likely to expand into other
serv|ce ||nes such as HR process outsourc|ng, fnance and
accounting, analytics and other niche services. BPO is in
the emerging stages. As adoption increases, and it becomes
adolescent, the provider landscape would also change with
much larger, sophisticated and specialist providers playing in the
space. This would further drive the expansion of the service lines
within BPO.
lOT-enab|ed so|ut|ons |n hea|thcare, educat|on, fnanc|a| serv|ces
and public services can drive socio-economic inclusion of 30
million citizens each year, faster, cheaper and more effectively
than traditional models hence its an important focus area for
Government.
1.13. Opportunites in Indian ICT Sector: Macro Outlook
The growth trend for the industry is expected to propel the Indian
IT-BPO exports market revenues to USD 175 billion by 2020, while
domestic revenues is expected to grow to USD 50 billion in the
same period
INDUSTRY VERTICAL PRESENT STATE FUTURE POTENTIAL
Access No Connectivity
Electromechanical Meters
Wireless
Smart meters (AMI)
Financial Services Poor reach in rural areas Financial Inclsuion
Smart Solutions
Energy Incandescent lightings
Energy Shortage
LEDS
Green energy/energy effc|ency
Healthcare Accessibilty and cost of healthcare Affordable devices/Telemedicine
Education Limited Education Digital/Virtual classrooms
Digitization Analog to digital Electronic sociuety/Unique ID/Digital TV, Radio
Security Human dependence Integrated surveillance systems
Others (like automobiles) High cost, High emission cars |ow cost, Zero em|ss|on cars
Table 8: Key Focus Areas for ICT
23 |
Indias healthcare industry is at USD 56 bn in 2010 accounting
for 5.5% of Indias GDP. It has been growing
24
at a CAGR of
12 percent for the period between 2001 and 2009. Health Care
Industry is
25
estimated to reach USD 75 bn by 2012 and USD
150 bn by 2017.
The primary constituents of Indian healthcare sector are:
Med|ca| care prov|ders: phys|c|ans, spec|a||st c||n|cs, nurs|ng
homes and hospitals
D|agnost|c serv|ce centres and patho|ogy |aborator|es
Med|ca| equ|pment manufacturers
Oontract research organ|zat|ons (ORO`s}, pharmaceut|ca|
manufacturers;
Th|rd party support serv|ce prov|ders (cater|ng, |aundry}.
Regu|atory Organ|zat|ons
SEOTlON ll. Sub-Sector Prof|es
2.1 Healthcare
The current per capita healthcare spend is low at around USD
49 per annum. Primary care accounts for around 60% of total
healthcare expenditure
Only 11% of the population has any form of health insurance
coverage. The market has been growing at a CAGR of 35% in last
fve years and |s expected to grow more than 40% |n forthcom|ng
years.
26
HEALTHCARE SECTOR STATUS
Pharmaceuticals Currently growing at CAGR of 12%
and is expected to be worth USD 20
bn by 2015 with 70 % of the demand
is met by local manufacturing.
Medical Tourism Market in nascent stage but is
developing very rapidly. Expected to
grow by 19% CAGR, expected to be
USD 3bn industry by 2013.
Medical Equipment and
Devices
Market worth USD 2.17 bn in 2008,
growing at a CAGR of 15% with 70%
of medical equipment for private
hospitals being imported.
Health Services Health Services outsourcing has the
potential to grow to USD7.4 bn by
2012, from USD3.7 bn in 2006.
Health Insurance With relaxation of FDI norms, the
private health insurance sector has
grown rapidly to become a USD 1 bn
industry in 07-08, expected to double
its revenues by 2012.
Table 9: Healthcare Sector Status
71%
13%
9%
4%
3%
Hosp|ta| Pharma Med|ca| Equ|pment & Dev|ces
Med|ca| lnsurance D|agnost|cs
Figure 9: Healthcare Market Breakup
27
23
EnY Report 2008
24
Zinnov Study
25
India Healthcare Trends 2008 Report by Technopak Advisors
26
Emerging Market Report: Health in India 2007 PricewaterhouseCoopers
27
Mckinsey Report-India Pharma 2015
HEALTHCARE IN INDIA
23

- 0.7 mn doctors
- 1.1 mn hospital beds
- 15,000 hospitals
- 3,900 Nursing Colleges & 1.4 mn nurses
- 303 Medical Colleges ~ 35,000 new medical graduates
each year
- 143 Pharmacy Colleges and 350,000 Chemists
- 70% of hospitals are in tertiary care

| 24
Based on the growth of the sector, healthcare industrys
spending
28
on IT requirements is expected to grow at CAGR
25% from USD 191 mn in 2010 to USD 1.5 bn annually by 2020.
In India, private healthcare accounts for nearly 80 per cent of
the countrys total healthcare expenditure, although it is more
expensive than public healthcare services.
ICT in Healthcare
There exists a disparity between adoption of ICT in Public and
Private Healthcare Sector. While the private sector has begun to
implement IT solutions, the overall Indian healthcare spend on IT
is miniscule compared to core sectors.
Currently, usage of IT is restricted to hospitals with application
across their key functional areas like:
Adm|n|strat|ve: Pay ro|| process|ng, lnventory Management
O||n|ca|: Ma|nta|n|ng Pat|ent records
F|nance and Revenue: B||||ng/ Revenue Management
E-healthcare in India has been limited to medical transcription,
health awareness through portals, telemedicine, hospital and
laboratory management systems, and some forms of customer
service through internet for the medical insurance sector. There
is negligible basis of e-healthcare systems in the government
health services in India. This is seen as an opportunity and has
triggered off private sector investment, especially in the tier 1
(state capitals) and tier 2 (other large) cities.
The software products available in India include some proven
systems from international companies as well as a few locally-
developed products. Large IT service providers including CDAC,
TCS, Wipro and Siemens Informations Systems Ltd are the key
players. These companies offer end-to-end solutions such as
Hospital Information Systems, Picture Archival Communication
Systems and Telemedicine.
lT can he|p de||ver a |ot of effc|ency and remove unnecessary
costs from public and private healthcare system in India. IT
systems can he|p to dr|ve up effc|ency of hea|thcare de||very
|nfrastructure, manag|ng uneven pat|ent fows for |n-pat|ent
procedures, cost management and business intelligence.
Cloud-based services will offer an alternative to on-premises IT
infrastructures and transition to virtualized server infrastructures
drives shared-disk storage. Virtualization will also have a lot of
relevance in the years to come as it brings advantages such as
reduction of power, cost and space, which optimization of server
infrastructure add to the positives.
Key Drivers of ICT in Healthcare
The ICT in healthcare delivery market in India is at a nascent
stage with high demand and growth potential. By 2020, the
Indian healthcare industry is estimated to be worth USD 275 bn
30

w|th s|gn|fcant share of the lOT. Some of the key dr|vers for the
growth of healthcare sector and ICT in it are:
Grow|ng Popu|at|on: lnd|a needs at |east 750,000 extra beds
to meet the demand for inpatient treatment by 2012
Expand|ng M|dd|e O|ass: R|se of ||festy|e D|seases
Growth |n awareness about Hea|th lnsurance
Boom|ng Pub||c Expend|ture and R|s|ng FDl & Pr|vate
Investment
lnd|a needs at |east 1 mn more qua||fed nurses and 500,000
more doctors by 2012.
31

lnvestment to the tune of SD 25-30 bn |s needed by 2012
Government and international agencies will be able to gear up
only a part of the total investment that is required and the rest
of investment has to come from private sector. ICT innovation
can play big role by increasing the reach of healthcare and
strengthening preventive healthcare so that the infrastructure
requirement doesnt arise at existing pace.
HCL Infosystems offered cloud as a solution to integrate data
spread across various hospitals of the Fortis chain. Under the cloud
so|ut|on, pat|ents are prov|ded a un|que |dent|fcat|on number wh|ch
enables Fortis hospitals across geographies to access patient data
and patients dont need to carry their medical records as they
move from one Fortis hospital to another - provides a uniform and
pleasant patient experience. Cloud also enables Fortis to provide
telemedicine to remote locations.
IT giant Dell is providing cloud services to Max Healthcare in
India. Dell Services has converted the Information Technology
infrastructure of all eight Max Healthcare facilities into a private
MPLS (Multi-Protocol Label Switching) cloud running remotely
from Dell Services Data Centre in Noida. This has resulted in Max
Healthcare becoming one of the most technologically advanced
Healthcare chains in India.
Cloud computing is expected to comprise 40 per cent (or USD 600
mn) of the total annual healthcare IT spending by 2020.
29
28
Report by Zinnov, 2011
29
Adapted from Zinnov Study
30
FICCI-Ernst & Young (E&Y) Report
31
www.indiarnd.com/papers/ICTInnovations.pdf
ICT SOLUTION-E-SWASTHYA
Piramal e-Swasthya focuses on improving healthcare access in rural
areas;70% of Indias population lives in rural areas
Model to develop No-Doctor Villages with tele-clinic facility and
treatment using e-diagnosis system
Reduced cost and improved quality of treatment for Rural Poor
25 |
The key opportunities in the Healthcare value-chain can be summarized as:
There is a dynamic shift in the healthcare system in India with
therapies-to-service models, from niche-to-mass markets, from
globally integrated businesses to locally connected businesses.
This demands a paradigm shift in the way the organization
operates v/s their current business models and business
strategies. To focus on this shift, organizations are building new
competencies, integrating processes, outsourcing non-core
operations and moving towards virtualization.
Key opportunities for ICT in healthcare
Hosp|ta| |nformat|on Systems |nc|ud|ng E|ectron|c Med|ca|
Records for patient management, Claims Management,
Critical Procedures Administration, TPA Communication and
Data-management Systems.
Oyber-surgery
Te|e-med|c|ne, |nc|ud|ng te|e-rad|o|ogy.
Med|ca| transcr|pt|on serv|ces
App||cat|on Software Systems lntegrat|on such as those for
EMR/EHR, CPOE, PACS and DSS requirements
Techno|ogy Oonsu|t|ng for Hosp|ta|s |nc|ud|ng |dent|fcat|on,
adaptation, security assessment and maintenance of various
wireless technologies such as PSTN, RFID, WiFi and DECT
Key Challenges for ICT in Healthcare
|ack of understand|ng of the ro|e lOT can p|ay, how to max|m|ze
the existing IT investments and make future investment
Poor hea|thcare |nformat|on techno|ogy, |ack of nat|ona|
standards for interoperability and connectivity
Oonnect|ng peop|e to the r|ght techno|ogy and |ntegrat|ng that
techno|ogy |nto the|r workfows.
Spend|ng |n the pub||c sector |s ||m|ted.
Ensur|ng affordab|e hea|thcare to masses wh||e adopt|ng lOT
in healthcare
LIFE SCIENCES
R&D
Manufacturing & SCM
Sales & Manufacturing
Corporate Governance
LIFE SCIENCES Healthcare Provider
HIS Solutions
EHR/NHIN/HIE Solutions
Telemedicine Solutions
Rating & Underwriting
Billing & Collection
Core Policy Administration
Claims Management
Benefit Validation
Customer Enrollment

| 26
The Indian Animation and Gaming industry stands at USD 0.7 bn
in 2010 having a CAGR of 25.6% p.a. for past 3 years. However
the industry size in India continues to be a miniscule 0.6% of
the global industry, which gives a large growth potential. It is
expected to reach a USD 1.84 bn
32
by 2015.
The revenue generation in the animation and gaming industry
is from both the sources: domestic and outsourcing work with
outsourcing being the major contributor of revenue. The share of
the domestic animation market was 30% in 2009.
With the success of the Indian IT/ITES industry and the inherent
advantages of outsourcing it was expected that the India would
be a preferred outsourcing destination to production houses
and game developers across the world. However Indias share
of the outsourced work in the animation and gaming industry is
very low. Major Asian countries like Philippines, Taiwan, South
Korea and China are the preferred outsourcing destinations for
2D Animation, Canada and UK are the leaders in 3D Animation.
For gaming, China is the most preferred destination followed by
other Asian destinations.
Market Structure
The four key segments of the Indian Animation and Gaming
industry are: Animation Entertainment, Entertainment VFX,
Custom Content Development and Gaming.
T||| now the outsourc|ng work |n lnd|a was confned to the
production and post-production activities, with Content
Development and pre-production activities being nascent, both
for the domestic and the outsourcing market. However, these
activities are seen to be emerging as Indian companies move up
the value chain.
2.2. Animation & Gaming
It is estimated that the Indian animation and gaming industry is
expected to grow at 21.4% p.a. during 2010-2015, thus reaching
a market size of USD 1.84 bn by 2015
70% of the revenues of the Indian Animation Industry are from the
outsourcing work done for the overseas clients
27 |
The animation market in India was at USD 0.5 bn in 2010 and
is expected to grow at a rate of around 20% p.a. to reach USD
1.27 bn by 2013
32
. The animation industry in India has three key
segments:
Oustom Oontent Deve|opment- major|ty market share of 50%
An|mat|on Enterta|nment
Enterta|nment v|sua| Effects (vF}
The Animation Entertainment is further segmented under:
Mov|es
Te|ev|s|on Broadcast
Te|ev|s|on Advert|s|ng
D|rect to DvD
The entertainment animation market is highly fragmented in
India with top 10 players contributing only 20% of the industry
revenue
33
.
Key dr|vers expected to |nuence the
growth of Animation Industry in India
lncreased Outsourc|ng by Overseas P|ayers: The recent
economic slowdown has forced the organizations to increase
focus on cost reduction leading to greater outsourcing to Asian
countries,
Greater outsourc|ng share for lnd|an p|ayers: lnd|an compan|es
are being recognized for providing timely and quality work
Evo|ut|on of lnd|an compan|es: lnd|an compan|es have moved
up the value chain by developing animation content
end-to-end.
Oompan|es adopt|ng the 'Oo-Product|on` mode|
(Revenue-Sharing) which opens high revenue opportunities
lncreas|ng usage of v|sua| Effects |n lnd|an F||m lndustry
(Bollywood) is expected to give a boost to the industry
lncreas|ng adopt|on of e-|earn|ng by corporate sector and
h|gher educat|on |nst|tut|ons |n lnd|a |s a s|gn|fcant opportun|ty

Opportunities in Animation segment:
Educat|ona| |nst|tutes: Schoo|s (K-12}, H|gher Educat|on
Institutes for their e-Learning requirements
Oorporate for the|r emp|oyee tra|n|ng / |nterna| commun|cat|on
/ web-site designing services/marketing collateral
lndustr|es such as Av|at|on, Defence, for spec|a| tra|n|ng
requirements are customers of this segment
lncrease |n the on||ne market|ng
2.2.1. Animation
TV broadcast segment has the largest market share among the
four ~50%
32
PwC Report: India Entertainment and Media Outlook 2011
33
Italian Trade Commission Report 2010 on Indian Gaming and Animation Industry
KEY PLAYERS IN CUSTOM CONTENT DEVELOPMENT:
- TATA Interactive Systems
- Educomp
- Everonn
- Learning Mate
- NIIT Ltd.
KEY PLAYERS IN ANIMATION ENTERTAINMENT AND
ANIMATION VFX ARE:
- DQ Entertainment
- UTV
- Crest Animation Studios
- Prime Focus
- Toonz Animation
- TATA Elxsi
- Pixion
- Prana

| 28
The Indian Gaming market stood at USD 0.18 bn in 2010 and
is expected to register a growth rate of 24.9% p.a. to reach
USD 0.56 bn by 2015
32
. This includes the revenues both from
the consumer market and the services market. The gaming
industry comprises four segments: Console, Mobile, PC and
Online. Console gaming has the highest share of 42% followed
by mobile with 28%
33
.
The Gaming consumer market in India comprises of PC Gaming,
Mobile gaming, Console Gaming and Online Gaming.
Gaming services market in India comprises:
Outsourc|ng deve|opment serv|ces
Anc|||ary serv|ces such as vo|ce and ema|| BPO support to
MMOG (Massive Multiplayer Online Games) gamers worldwide,
porting, testing, etc.
Console Gaming: The console gaming segment had
the highest market share of 42% in 200933. The console gaming
segment is dominated by the foreign players.
Mobile Gaming: The mobile gaming market in India
has tremendous potential given that the mobile platform
has the highest reach in India. It is estimated that over 3 mn
users are engaged in mobile gaming every month. With falling
mobile prices, presence of almost all the international players,
introduction of 3G services, the mobile consumer base in India
is increasing at 60% per annum
33
which is expected to push
demand for mobile games as well as its services manifolds.
PC Gaming: The s|gn|fcant revenue |n the PO gam|ng
consumer market is shared by the foreign players with low
margins.
Online Gaming: Currently, advertising forms the major
chunk (85%) of the revenues from online games market in India.
However, as penetration of the internet in India and consumption
of online games increases, this percentage is expected to change
favourably towards subscription.
Key growth drivers for the Indian
Gaming Industry
lncreased Outsourc|ng: Gam|ng p|ayers overseas are
increasingly focusing on cost reduction leading to greater
outsourcing.
lncreased share for lnd|an Oompan|es: w|th the sk|||-sets of the
Indian companies, outsourcing share is expected to go up.
lncreased demand for Gam|ng (G|oba| & Domest|c}: G|oba||y,
gaming is expected to continue its growth especially with
the trend of Massive Multi-Player Online Role Playing Games
(MMORG) picking up. This is expected to lead to more
development, testing and porting work for Indian players.
Gam|ng, espec|a||y mob||e gam|ng |n lnd|a |s expected to go
up on account of increasing mobile and internet penetration
coupled with increased affordability due to falling prices of
games.
Key Challenges in Animation and
Gaming Industry
The Indian Animation and Gaming industry holds a large potential.
However, it faces numerous challenges in realizing the potential:
Huge ta|ent crunch because of ||m|ted tra|n|ng |nst|tut|ons, non-
standardized curriculum and lower awareness among students
for animation and gaming
Ou|tura| Oonstra|nts: An|mat|on and gam|ng |n lnd|a, as an
entertainment genre is restricted to kids.
|ack of Government support |n terms of subs|d|es, grants,
rebates or tax treaties: This limits the cost advantage that Indian
players offer compared to other outsourcing destinations
|ack of str|ngent ant| p|racy |aws and lPR protect|on |n lnd|a
2.2.2. Gaming
KEY PLAYERS IN GAMING INDUSTRY:
- Indiagames
- Trine Entertainment
- Lakshya Digital
- Jamdat
- The Porting Lab
- Dhruva Interactive
- FX labs
- RZ2 Games
- Milestone eExpress, I-Energizer
29 |
Education Sector is by far the largest capitalized space in India
with USD 30 bn of government spend (3.7% of GDP), and a
Network of ~1 million schools and 18,000 higher education
|nst|tutes. Yet, the pub||c educat|on system |s '|nsuffc|ent` and
'|neffc|ent`, |ead|ng to spends of SD 50 bn on pr|vate educat|on.
40% enrolled population attends 75000 private schools (7% of
total schools).
The countrys literacy rate has improved from 64.8% during 2001
to 74% as per the Census 2011.
Indias current spend on education is at 5% of average household
(HH) income and is growing at a CAGR of 8.6% versus
consumption growth of 3.2% over 1995-2005. Due to rise in
paying capacity and higher aspiration for education, spends on
Private education is expected to increase to USD 80 bn by 2012.
Indians spend over USD 13 bn annually on higher education in
the overseas markets.
ICT in Education
ICT in education sector consists of the implementation of various
IT tools and applications which help facilitate imparting of better
and effc|ent educat|ona| serv|ces. The market s|ze |s est|mated
to be valued at USD 0.53 bn in 2010.
lOT adopt|on |n Educat|on |s expected to grow s|gn|fcant|y
due to Governments initiatives on PPPs and private sector
investment in various high growth categories such as Multimedia
and ICT applications in Schools despite the slow growth of IT/
ITES training segment.
2.3. Education
Indian Education Sector (IES) - Structure
(VALUES IN MN USD) REVENUES34 (2008) % SHARE OF TOTAL REVENUES (2012 E) CAGR (%)
Formal IES 40000 80 65250 13
K12 (Kindergarten to
12th Standard)
20000 40 33779 14
Higher Education 20000 40 31470 12
Non-formal IES 10110 20 19608 18
Preschool 300 0.60 1026 36
Multimedia in private
schools
70 0.14 459 60
ICT in govt schools 90 0.18 752 70
Coaching classes 6400 12.77 11194 15
Books 1500 2.99 3662 25
Table 10: Indian Education Sector Structure34
KEY ICT PLAYERS IN EDUCATION SECTOR ARE:
Educomp
Everonn
NIIT
Compucomm
34
IDFC-SSKI India Research 2009

| 30
Figure 10: ICT for Education Ecosystem
Non formal education opportunity
Organized preschool market (USD 300mn; 36% CAGR till 2012Ej.
Multimedia for private schools, (USD70m, ~60% CAGR till 2012Ej, offers value creation potential since it is highly
under penetrated and a technology-driven model.
SEGMENT
34
REVENUES
(MN USD)
GROWTH DRIVERS KEY RISKS KEY PLAYERS
2008 2012 E
Multimedia in private
schools
70 500 5% of private unaided schools
have been covered a highly
unpenetrated market
Large upfront
investment Educomp Smart
Class
Everonn Vitels
NIIT Eguru
ILFS Kyan
Plans to foray
Navneet Ebook
Providing technology as
an aid to chalk & talk in
K12 under the BOOT
model
CAGR 60% Market potential in excess of
USD1.5 bn
Duplication of
content
Existing model set to witness high
growth due to |nfn|te return on
investment for schools
An annuity model
Table 11: Drivers, Risk and Key Players in ICT in non-formal Education Sector
ICT in Government Schools Opportunity
Currently USD 90 mn market with penetration of less than 11% is expected to double in size by 2015.
The Government is increasingly opting for Public Private Partnerships (PPP).
POLICY PLUS
Deta||ed lmp|ementat|on P|ans
and Operational Strategies to
support Policy Statements
F|nanc|a| a||ocat|ons to rea||ze
policy objectives
lnst|tut|ona| Oapac|ty
& Political and
Administrative Will
Oommun|ty demand for lOT
School
Teacher
Classroom
Student
Capacity Building
Content Development
Curriculum
Framework
Monitoring and Evaluation
Public Providers
Private Providers
I
n
s
t
i
t
u
t
i
o
n
a
l

M
e
c
h
a
n
i
s
m
31 |
SEGMENT34 REVENUES
(MN USD)
GROWTH DRIVERS KEY RISKS KEY PLAYERS
2008 2012 E
ICT in public schools 90 750 Underpenetrated market with 9% of
the government schools covered
Large upfront
investment
Educompp
Everonn
NIIT
Compucomm
Core Projects
Various Regional
Players
PPP in education Government to increase spends
(allocation for SSA increased 4X in
11th Plan)
L1 bidding leading to
commoditization and
low margins
Providing IT
infrastructure & training
29000 schools up for bidding in
FY09
Long receivable
cycles
Funded bycentre/
states under Sarva
Shiksha Abhiyan (SSA)
Table 12: ICT in Government Schools Opportunity
Vocational Training Market
Currently at USD1.5bn with a CAGR of 25% accounts for 15% of the non formal lES segment. Domestic lT/lTES Training is one
third of the Vocational training market.
SEGMENT34 REVENUES
(MN USD)
GROWTH DRIVERS KEY RISKS KEY PLAYERS
2008 2012 E
Vocational Training 1500 3660 New opportunities apart from IT
retail, BFSI, English and Life skills
trainings
Slowdown in IT and
other services sector
NIIT
Aptech IT and
Aviation (Avalon)
Jetking
CMS
ICA
K10
Russell English
Training
Frankfnn
Caters to Age group
>14 years
CAGR 25% Employers demand productivity
from day one.
Corporate training
revenues have low
margins; revenue
lumpy in nature
(USD 550 mn for
domestic IT training;
USD 1 bn for vocational
training such as retail,
avaiation, English and
FMT)
Indias demographic dividend
surplus of 47mn working age
population while shortage of 56mn
for ROW by 2020E
Table 13: Vocational Training Market Segment
e-Learning
35
With the advances in digital electronics, e-learning has
become an effective tool to enrich the courseware content
with multimedia features like audio, video, graphics and
3D-animation.
E-Learning is one of the thrust areas identifed by the Human
Resource Development Department of the Union Government.
The thrust of the e-Learning programme is to effectively
integrate e-Learning methodology and approach with the
conventional classroom system to maximize the benefts
fowing from the traditional education system, increase its
reach to more and more learners and spread e-Learning from
teaching of IT related subjects to other subjects in the school
curricula.
MICROSOFT PROJECT SHIKSHA
Instils ICT skills required to enhance the teaching learning process
INTEL TECH PROGRAM
Provides in-service and pre-service teacher training to help
teachers integrate technology in the class room
35
www.mit.gov.in/content/e-learning

| 32
Major ICT Initiatives in Education
in India
36

1. Teacher Training
Teacher training activities to date focus mainly on computer
literacy instead of enabling teachers to integrate ICT in their
day-to-day teaching activities and master the use of ICT as an
effective tool to improve teaching and learning.
2. ICT Infrastructure in Schools
ICT as a subject in the curriculum and the corresponding
establishment of computer laboratories is a key focus in the
policy framework in India. As a result most of the initiatives
taken by the government involve providing computer
laboratories to schools particularly secondary and higher
secondary schools. Many private and non government
organizations, either independently or in collaboration with the
government, have also been providing computer to schools.
Apart from computers, some other ICT facilities such as
satellite broadcasting, video-conferencing and multi-media
storage technology (CD-ROMS & DVDs) can be seen in
schools.
3. ICT for Non-Formal Education (NFE)
Non Formal Education (NFE) has been encouraged to provide
mass education to the large majority who were outside the
ambit of the formal school system. ICT could be a useful tool
to reach out to such people.
4. Open & Distance Learning (ODL)
ln lndia the benefts of an ODL system have been extended at
the school level. The imperative of developing an ODL system
more or less came from recognition of the need to promote
mass education. Historically, the ODL institutes were using
traditional print supplemented with video and audio based
programmes. However, more recently with the development
of innovative and modern technology, these institutes have
begun integrating video conferencing and other multimedia
tools.
Government Initiatives
The policy framework, fnancial support and guidelines to
ensure a national standard of education are provided by the
Government of India through the Ministry of Human Resource
Development (MHRD). The implementation of the policies and
guidelines is primarily done at the state level.
Some of the key initiatives to use ICT in Education are as
follows:
Government's SSA (Education for Allj initiative, launched in
2001, encourages states to use the lCT and satellite EDUSAT
(Education Satellite) to provide distance education.
The lCT at Schools was launched in 2004 with a view to
provide opportunities to students to develop their ICT skills
as well as use ICTs to aid the teaching learning process.
Under this scheme, support is provided for procurement of
computers, peripherals, software, connectivity, and so on.
The National Mission on Education through lCT, launched
in 2009, aims to leverage ICTs for enhancing the teaching
learning experience of learners. The Mission focuses on
content generation and providing connectivity.
More recent initiatives include upgrades to the Education
and Research Network (ERNET) connecting various
universities and regional engineering colleges (RECs),
lowering customs duties on lT products, allowing 100%
foreign investment and passing the Information Technology
Act, 2000.
Key Drivers of ICT in Education
The experience with the open education system so far has
convinced policy-makers in the government that use of ICT
in education has great potential to supplement the formal
education system and to provide quality education to large
segments of population through cost-effective, open, and
fexible manner. Open education systems are initiated in
most of the states; however, their development is at different
levels. Encouraging Government initiatives to build capacity
and ensure higher rural education penetration, Private Sector
Investment through PPPs, high requirement of physical
infrastructure for Education to keep pace with requirement
due to population growth and improved aspirations, and need
for better and high quality educational services are boosting
the ICT usage in education.
SARVA SHIKSHA ABHIYAAN (SSA)
SSA in collaboration with IL&FS Education and Technology service
limited is in the process of establishing computer labs in 200
schools in Bihar
EduSat Education Satellite
EduSat facilities are being used by schools across the nation to
provide high speed internet connectivity
EduComp Solutions Ltd.
EduComp partnered with state government to provide
infrastructural support and content to over 14000 government
schools
36
Survey of ICTs for education in India & South Asia, 2010 infoDev & PwC
INDIRA GANDHI NATIONAL OPEN UNIVERSITY
Provides a two year diploma course in primary education by using
print material supplemented with radio and television program
33 |
Key Challenges
India faces a number of unresolved issues and challenges for
the adoption of ICT in the education sector:
Low Literacy Level: Literacy levels in lndia are low, even
those deemed to be literate are perhaps not competent
enough to receive IT education.
Technophobia: To increase digital literacy levels among
students and teachers, steps will need to be taken to
overcome their technophobia. Teachers are typically wary
of technology.
Monitoring and Evaluation: The penetration of hardware
is fairly high in most schools; however the level of usage
is debatable since there is no auditing or monitoring to see
whether students are actually using these computers.
Guidelines for Procuring Content: There are also no clear
guidelines available for procuring quality content. Identifying
quality content is a common constraint for schools looking
to use ICT-enabled teaching learning practices.
lnstitutional fragmentation: Curriculum decisions,
infrastructure decisions, content decisions, policy making,
and policy implementation are all taken up by different bodies
at different levels.
Poor lnfrastructure: Rural lndia faces other infrastructure
issues like level of internet penetration and low electrifcation.
Other constraints faced by lndia include linguistic diversity
and income disparity.

| 34
The manufacturing sector is estimated at market capitalisation of
USD 520 bn by 2014-15
37
.
Over last two decades, a large number of MNCs across different
verticals have set up their manufacturing units in India. The major
reasons are the availability of educated and cheap workforce as
well as to tap the large Indian market. These MNCs bring their
own set of ICT solutions, for manufacturing, with them which is
at par with the global standards.
The manufacturing sector of India comprises approximately
53 lakh units. These units are spread across various verticals
with highest contribution from Food and Beverages followed by
Textile, Fabricated Metal Products, etc.
However the majority of players (99% of manufacturing
units) in India qualify under the Micro, Small and Medium
EnIerpr/se [MSME} caIegory and Ihese rms /ack even Ihe
basic ICT services.
The IT spending in the manufacturing sector as a percentage of
revenue in FY09 and FY10 are 0.6% and 0.8% respectively
38
.
To remain competitive in the global scenario it has become
|mperat|ve for these frms to adopt lOT for the|r system.
Status of Technology
There is awareness about basic ICT solutions (communication,
co||aborat|on, fnance & account|ng and payro|| & HR
management). ICT solutions for core manufacturing processes
fnd awareness most|y among med|um |eve| manufactur|ng frms.
Core ICT solutions for manufacturing such as ERP and DMSS
are strugg||ng to make the|r way among manufactur|ng frms.
|ower usage |eve| has been observed |n frms that do not |nvest
in training at the time of ICT deployment.
Demand Drivers
The demand drivers in the sectors are requirement of the
manufacturer for better business process systems for
|mprovement |n the effc|ency. The fo||ow|ng are the key benefts
manufacturers seek and drive the manufacturer for adopting ICT:
Process fow and better |nventory contro|
Externa| factors such as c||ent requ|rements, comp||ance and
to tackle competition in the market
Faster commun|cat|on wh|ch |eads to |nformed dec|s|on mak|ng
F|nance and account|ng funct|ons he|p frms comp|y w|th the
accounting standards
Bus|ness deve|opment act|v|t|es
Opportunities
MSMEs in India have very different business practices and are
fnd|ng |t very d|ffcu|t to compete |n the g|oba| scenar|o. A|so the
MSMEs in India are new to the idea of keeping a budget for ICT
and they avail the services when the requirement arises. There
is an increasing trend of MSMEs adopting the ICT solutions but
a lot of hesitation has been observed due to lack of success
stories.
Opportunities exist in the MSME domain for ICT companies if
they can address the issues of:
Mapp|ng the bus|ness processes w|th workfows for custom|s|ng
software applications to smoothen the adoption system
Systems for stream||n|ng the fnances
Better |nventory contro|
ldent|fy|ng the requ|rement of the |ndustry and prov|d|ng frm
spec|fc lOT so|ut|ons
S|mp||fy|ng comp|ex adopt|on system
Prov|d|ng the tra|n|ng and after sa|es serv|ces after |mp|ement|ng
the solutions
2.4. Manufacturing
The contribution of the manufacturing sector in the GDP of
lndia has been constant at around 15%, over the past decade.
Indias manufacturing strength lies within the micro, small and
medium enterprises with close to 99 per cent of the total units
falling under the same
Adoption of ERP is at a very nascent stage with only 7 per cent
adoption among the manufacturing units.
One of the major barriers in its adoption is the lack of reliable
and trustworthy system integrators, especially in smaller cities.
It is observed that the verticals with comparatively high
technological maturity seem to be ahead of the others in the
lCT adoption; examples are auto components, chemicals and
electrical machinery. For instance in the auto industry, the
automobile original equipments manufacturers in the country
use advanced technology and are large in size and they have
high level of ICT adoption. This has resulted in a top-down
push towards Tier I suppliers who are auto component
manufacturers.
The identifed lCT solutions for the manufacturing sector are
under the domains of: collaboration, communication, fnancing
& accounting, payroll & HR management, procurement, order
processing, product lifecycle, quality management, centralised
system (ERP), decision support system
37
Study by Confederation of Indian Industry and the Boston Consulting Group
38
Adapted from Zinnov Study
35 |
Major Challenges
The challenges faced by the technology service provider can be
broad|y c|ass|fed under hardware, software and serv|ces.
The software cha||enge |s to address the |mp|ementat|on,
piracy and local language issue
Hardware sect|on |s p|agued w|th h|gh cost assoc|ated w|th
infrastructure and taxes
The serv|ce sect|on cha||enge ||es |n prov|d|ng qua||fed and
trained service providers for various services such as system
implementation, support and maintenance
At the customer level, awareness is the biggest challenge that
hinders the growth of ICT adoption among Indian manufacturing
frms. As the lOT so|ut|ons are c|ass|fed under bas|c and
core ICT solutions, the basic ICT services have high awareness
among the MSMEs which is attributed to its free and low cost
availability. Core ICT solutions are able to maintain awareness
only among medium sized manufacturers. Other challenges
at the frm |eve| are: Absence of proper so|ut|ons, Absence of
experts, Complex adoption system and Budgets.

| 36
India is the worlds second-largest telecom market. The total
subscriber base (including landline and wireless) reached 787.28
million
10
in December 2010. It is an important contributor to
Indias GDP with a total market worth USD 33 bn; and has
grown at a CAGR of 10.53% (by revenue) and 34.66% (by no
of subscribers). It has been one of the high growth areas over
the last decade and is expected to grow at a CAGR of 10.1% by
subscribers (2010 to 2015)
39
.
Urban subscribers account for more than 65% of the total
subscribers. About 24% (by revenues) of the market is occupied
by the public sector.
The easy access to mobile services is the outcome of positive
regulatory changes, intense competition among multiple
operators, |ow-pr|ced handsets, |ow tar|ffs and s|gn|fcant
investments in telecom infrastructure and networks.
Wireless Mobile Market
The growth of the Telecom Industry has been largely driven by
the growth seen in the wireless telecom sector. This segment has
seen grown at CAGR of 77.5% from 2000 to 2010, it is expected
to grow at an overall CAGR of 10.1% from 2011 to 2020 with
rural and low income groups being the major drivers.
The sector is dominated largely by private players. On the
technology front, GSM is more popular than CDMA in India.
Go|ng forward, fnanc|a| pressures and shr|nk|ng proft marg|ns
due to competition and low Average Revenue per User (ARPU)
ar|s|ng out of s|gn|fcant |nact|ve and mu|t|p|e users |s expected
to lead to consolidation in the sector.
2.5. Telecom
Indian Wireless Market 39
Second largest market after China
Total subscriber of 584.3 mn in FY10
Teledensity of 58% in Sept, 2010
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Sep-10
2.9 Tota|
W|re|ess
|and||ne
3.6 4.3 5.1 7 9 12.9 18.2 26.2 37 52.7 61
0 0.4 0.6 1.2 3.2 4.8 9 14.6 22.8 33.7 49.6 58
2.9 3.2 3.7 3.9 3.8 4.2 3.9 3.6 3.4 3.3 3.1 3
0
10
20
30
40
50
60
70
80
Teledensity in Wireless and Landline
T
e
l
e
d
e
n
s
i
t
y

%
32%
60%
rban Rura|
39
EnY Report Enabling next wave of Telecom growth in India, 2011
Figure 11: Teledensity in Wireless and Landline
Figure 12: Telecom Urban Rural Divide
37 |
0
FY05 FY06 FY07 FY08 FY09 FY10 Sep-10
5
10
15
20
lnternet
Broadband
Wireline
The wireline market has grown at a meagre CAGR of 3.3% from
2000 to 2010. It is expected to grow at CAGR of 4%, to reach
29 million by 2015.
The wireline market is dominated by the government controlled
Public sector organizations who also offer wireless services. A
few pr|vate p|ayers have a|so ventured |nto the fxed-||ne market
offering services like Value Added Services such as high-speed
internet access, video on demand and videoconferencing.
While the landline market has not grown as extensively compared
to the growth in wireless infrastructure, there is opportunity for
growth in data services. Emergence of new technologies such as
fber to the home |s expected to dr|ve the growth of the w|re||ne
market in India.
Internet and Broadband
The market for Internet and Broadband in India has grown at a
CAGR of 24% and 117% to reach 16 mn and 9 mn, respectively
in 2010. In terms of revenue the total market is worth USD 1.9 bn
in FY2010
40
. The growth is primarily due to increased presence
of the private players, emergence of new technologies and up-
gradation of telecom infrastructure.
0
500
2009 2010 2011F 2012F 2013F 2014F 2015F 2020F
1000
1500
2000
I
n

m
|
|
|
|
o
n
s
Figure 13: Wireless Subscribers Forecast and GSM CDMA Divide
Figure 14: Internet and
Broadband Subscribers
Wireless Subscribers Forecast Wireless Technology GSM vs. CDMA
GSM ODMA
Data as of Sept. 2010
100% = 687.7mn
84%
16%
39
EnY Report Enabling next wave of Telecom growth in India, 2011
40
www.trai.gov.in/reports_list_year.asp
WIRELINE MARKET
39
Wireline Market
39
Subscriber of 37 mn in FY10
Teledensity of 3.1% in Sept, 2010
73% subscribers in Urban areas
As of Sep 2010, there were 3.5 mn public call offces and 0.6
village public telephones

| 38
TYPE OF VAS MARKET SHARE EXAMPLES
Entertainment VAS 57% SMS Jokes, Callertunes, Music Downloads
Information VAS 39% News, Weather reports, Stock updates
m-commerce 4% Mobile Ticketing, Mobile as debit cards, money transfer etc
Table 14: Value Added Services (VAS) Market Share
Broadband penetration in India is currently concentrated in urban
areas driven by affordability and availability. Expansion of internet
and broadband services opens up host of opportunities for
education, governance, entrepreneurship and services sector.
The opportunities hold a much larger promise for Indias large
low-income population and a growing economy.
Value Added Services (VAS)
The VAS market in India has been growing at a CAGR of over
50% during 200610. Following is the structure of the VAS
market:
Increasing subscriber base, competition forcing operators to
differentiate, pressure on earnings through basic telephony
services and the rollout of 3G services is expected to drive the
mobile VAS market in the future, creating opportunities for both
telecom operators and companies engaged in VAS.
Share of m-commerce is expected to grow with the growth of
e-commerce
The growth of broadband is expected to increase with uptake of 3G and BWA services and is expected to reach 150 million
by 2020.
5.6 11.5 6.9
48
9.3
100
11.1
150
No. of househo|ds (|n m||||ons}
No. of broadband connect|ons (|n m||||ons}
0
30
60
90
120
150
Figure 16: VAS Market Size
Source: EnY Report - Enabling next wave of Telecom
growth in India, 2011
Figure 15: Broadband subscribers Forecast
Market Size of VAS
KEY PLAYERS IN VAS SEGMENT
The key players in this sector are: all mobile operators, Onmobile,
Webaroo, Bharti Telesoft etc.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2006
I
n

U
S
D

b
|
|
|
|
o
n
s
2007 2008 2009 2010 (F}
39 |
Figure 16: VAS Market Size
Source: EnY Report - Enabling next wave of Telecom
growth in India, 2011
Enterprise Data
NLD (National Long Distance) and ILD (International Long
Distance) are two segments of the enterprise data market in
India. NLD & ILDs Market revenue in FY10 was USD 3.64 bn
& USD 3.91 bn respectively. Overall the enterprise data market
in India is growing at a CAGR of 10% and is expected to touch
the USD 10 bn mark in the next 5 years. The growing demand
for connectivity is coming primarily from the IT and IT-enabled
serv|ces sector (lTeS}, the fnanc|a| serv|ces sector and the
government. Most large global players have set up operations in
India to cater to the connectivity needs of their customers.
Voice over Internet Protocol (VoIP) is considered a key enterprise
application for lowering operating costs. It has spurred the
demand for IP-based virtual private network (IP-VPN) services in
India. The other services relevant to this segment are international
private leased circuits, internet connectivity; multiprotocol label
switching (MPLS) based IP-VPN services, and national and
international data connectivity.
Telecom Infrastructure
Today, there are an estimated 425,455 telecom towers in India.
The te|ecom |nfrastructure |ndustry faces |ow proftab|||ty, and has
a pre-tax margin of 7%8%. Overall, the industry has invested
about USD 22 bn and is expected to invest another USD 11 bn
over the next two years.
Other Key Opportunities:
The wireless telecom and internet & broadband markets would
continue to grow in double digits for some years to come, and
thus present very good opportunity overall. Some of the key
areas where markets are expected to be very lucrative:
3-G Services: It is expected to account for 20% of market
share (more than USD 10 bn by some estimates) by 2020.
BWA (Broadband Wireless Access): It is expected that
this technology would have transformational change on the
broadband penetration in India. The whole ecosystem still
needs to develop though.
M-advert|s|ng: This market is expected to take off once the
3G deployments are complete with videos adding another
avenue of advertising.
M-commerce: In India a large chunk of population is unbanked
and m-commerce w||| p|ay a major ro|e |n fnanc|a| |nc|us|on
M-hea|th: M-health applications enable real-time collection of
health data, delivery of health care information to practitioners,
researchers and patients and real-time monitoring of patients.
lt has s|gn|fcant potent|a| to transform the hea|th care de||very
in India
Key Challenges
Increased Compet|t|on and D|m|n|sh|ng
Revenue Streams:
With new players entering the market, telecommunications
companies are competing strongly and selling products and
services beyond their core offerings and at much cheaper
prices. This is resulting in less revenue from traditional sources,
more pressure on proft marg|ns, and an urgency to fnd new
revenue streams by investing in new technologies such as VoIP
or fxed/mob||e convergence.
H|gh cap|ta| |nvestments, we||-estab||shed p|ayers who
have a nationwide network, license fee, continuously evolving
technology and lowest tariffs in the world are key challenges
for new players
Stagnat|on of growth |n the |and||ne market |s a cha||enge for
Industry for holistic growth
lnadequate |nfrastructure, absence of |ow-cost dev|ces,
inadequate content and applications in regional languages
are some of the challenges for broadband penetration, a key
parameter which is accepted as a measure of a countrys ability
to compete as an economic power.
The ava||ab|||ty of spectrum for commerc|a| serv|ces |n lnd|a
is below the required levels. In the absence of a long-term plan
to meet future requirements, the advent of new technologies is
expected to create conf|cts for spectrum.
The |ndustry suffers from a huge regu|atory r|sk due to
uncertainty in licensing and spectrum policy, lack of domestic
manufactur|ng and |ost opportun|t|es |n fu|f|||ng the un|versa|
service obligation.
Poor governance often |ead|ng to non-transparent and
controversial implementation of policies (2G Scam)
Key Drivers
Ourrent|y, more than 60% of 1.2 b||||on lnd|an res|de |n rura|
areas where the teledensity is 28.4 % (as of Sept, 2010). The
total broadband density in India is at 0.7%. The GoIs aim to
reach rural teledensity of 40% by 2014 from the current
levels and achieve broadband coverage of all 250,000 village
panchayats under the Bharat Nirman Program.
Reduc|ng Tar|ff and ava||ab|||ty of cheap handset mak|ng mob||e
telephony affordable for masses
Mob|||ty and Oonnect|v|ty: The grow|ng need of h|gh mob|||ty
KEY PLAYERS IN TELECOM INFRASTRUCTURE
The key players in this sector are Bharti Infratel, Indus Towers,
Reliance Infratel, BSNL, MTNL etc
KEY PLAYERS IN ENTEPRISE DATA SERVICES
The key players in this sector are Tulip, Tata communications,
Reliance Communications etc

| 40
and staying connected is the prime driver for the entire category.
lt |s expected that the share of 3G subscr|bers, current|y at
about 3% would increase to about 20% by 2020 and data
services would increasingly account for a higher chunk
of revenues.
The share of w|re|ess techno|ogy |n broadband (datacards
etc) continues to be negligible (1.6%) and remains to be fully
exploited, especially in the case of broadband services.
Techno|ogy deve|opment and h|gher adopt|on of other
enterprise data services (like ILD, NLD) is expected to drive
the growth.
41 |
Indian Financial Intermediation market comprises of range of
players like Public Sector Banks, Private Banks, Foreign Banks,
Cooperative banks, Regional Rural Banks (RRBs), Non Banking
Financial Companies (NBFCs), Housing Finance Companies
(HFO`s}, Post offces, M|crofnance lnst|tut|ons (MFl`s} and
neighbourhood money lenders.
Over the last decade, the size of the banking industry has grown
by 7.5 times. The business per employee has increased from
SD 0.6 mn |n FY06 to 1.39 mn |n FY10, wh||e the proft per
employee increased from USD 2000 in FY06 to USD 8700 in
FY10
41
.
ICT in Banking and Financial Services
ICT has been instrumental in the global expansion of banks. It
has helped banks put in place alternate delivery channels such
as internet and phone. Mobile banking and ATMs are rapidly
becoming the prime delivery channels. Key areas where the ICT
has direct application in banking sector are:
E-Bank|ng: Using alternative delivery channels such as Phone,
ATM, Mob||e, lnternet and creat|on of new fnanc|a| serv|ces
& products such as DMAT, utility bill payment, Electronic fund
transfer, Payment gateway etc.
Core Bank|ng Serv|ces: Basic business of a bank or a
fnanc|a| |nst|tut|on. lt |s tak|ng depos|ts from customers and
lending to customers
E|ectron|c C|ear|ng Serv|ce (ECS|: Mode of electronic fund
transfer in quick manner across branches of one bank to any
other bank through a central gateway
Fund transfer protoco|s used by the banks
Mu|t|-app||cat|on Smart Cards: Payment system based on
the inter-operable systems and technological components of
the entire system
E|ectron|c Data Transfer: Sharing of various electronic
document
Mob||e Bank|ng: Banking transactions using mobile phones
by bank customers
ICT in Insurance
The key areas of ICT applications in insurance sector are:
E-CRM: Insurance industry is a data-rich industry, and
thus, there is a need to use the data for trend analysis and
personalization. E-CRM helps in reducing the cost of marketing
wh|ch |ncreases the proft of bus|ness.
E-Insurance: This provides convenience to the customer to
have all information at the click of a button like on-line status
of balance premium, maturity date, dues and outstanding,
payments and payments etc.
Other IT spec|c areas: In addition e-CRM, e-insurance and
various other softwares are used for accounting and other
functional requirements of the Insurance Company.
Mobile Banking:
Mobile banking is set to revolutionize the way banking is done
in India. Currently, 5% of mobile phone subscribers of reported
700 mn are registered for the service. Even among the registered
users, only a small fraction uses it regularly. Approximately
680,000 transactions worth USD 13.55 mn is conducted every
month. Mobile banking in India is set to generate a fee-based
|ncome of SD 4.5 bn over the next fve years, ma|n|y dr|ven by
lower transaction costs, favourable regulatory environment and
the UID project.
By 2015, USD 350 bn in payment and banking transactions
cou|d fow through mob||e phones, compared w|th about SD
235 bn of total credit-and debit-card transactions today.
Key development in M-Banking:
lMPS (lnterbank Mob||e Payments Serv|ce} a mob||e bank|ng
service, offers an instant, 24X7, interbank electronic fund
transfer service through mobile phones. It is one of the fastest
growing subsectors under the mobile banking.
Prepa|d Wa||ets and Mob||e POS: Stored va|ue prepa|d wa||ets
are being experimented in a large way in India and it is believed
that prepa|d-based mob||e wa||ets can dr|ve fnanc|a| |nc|us|on.
Electronic Payments
In 2010, Indias electronic payments were USD 17 trillion. There
has been s|gn|fcant growth |n the e|ectron|c payments from
below 5% of the total value in FY05 to 88% in FY10, largely
due to the e|ectron|fcat|on of bus|ness-to-bus|ness payments.
With over USD 133 bn payments from bank accounts via ECS
and NEFT, electronic fund transfers have emerged as the much-
preferred option for transactions, with an increasing orientation
toward cashless and even cheque-less payments in India.
2.6. Finance, Banking & Insurance
SUCCESS FACTORS FOR MOBILE BANKING SOLUTIONS:
- Mass Reach
- Security Levels
- Convenient and easy
- Service provider agnostic
- Low set-up costs and time /
no additional infrastructure
- Competitive pricing with
existing methods
41
IDRBT Report

| 42
Payment Flows as Times of GDP
Key trends and development in Electronic Payments segment:
E|ectron|c/on||ne mode of payments for the purchase of
goods and services
Mak|ng payments to pub||c ut|||ty compan|es
lmp|ementat|on of the next generat|on rea| t|me gross
settlement (NG-RTGS) system
Prepa|d cards |n card-based, paper-based and other e|ectron|c
formats, including virtual/mobile wallets

CRM Initiatives
CRM has been in India for a long time now, but its penetration,
espec|a||y |n the fnanc|a| serv|ces market, has been rather
limited. A higher penetration can be achieved only when banks
have a robust CRM system running across the entire organization
seamlessly across channels providing customers with the right
product at the right time through the right channel.
Following are the key areas on which the banks are focusing
upon to enhance their CRM capabilities:
Oustomer educat|on
Gr|evances hand||ng
Oustomer serv|ce de||very channe|
Oross channe| |ntegrat|on
lncorporat|on of ana|yt|cs as dom|nant techno|ogy |ead|ng to
increase in cross sales
ORM for |nnovat|on
ORM 2.0 w|th the advent of WEB 2.0
IT Implementation and Management
The RBI has set the guidelines for technological requirements
on core bank|ng so|ut|ons (OBS}, for a|| the bank|ng and fnanc|a|
services companies. The major areas of focus for the banks in
the IT implementation are:
Techno|ogy so|ut|ons, lnfrastructure management, Systems
management
lT |nformat|on secur|ty (|nsta||at|on of frewa||s, network-based
intrusion prevention system (NIPS) and host-based intrusion
prevention system (HIPS) as well as the installation of anti-
spam and anti-virus)
lT governance, r|sk and comp||ance (GRO}
lT as Strateg|c Enab|er to Reduce Oosts or lncrease Revenues
Backup and D|saster Management P|an
Energy Management
KEY IT INITIATIVES OF BANKS FOR INTERNAL EFFECTIVENESS
Data co||ect|on package for the var|ous Bancassurance products of the bank
Oentra||zed web-based |nspect|on |nformat|on system
O|a|m|ng re|mbursement of FlT (Funds |n trans|t} ATM cash through RAOS (Reconc|||at|on account|ng and cash sett|ement}
Rev|ew and renewa| of structured |oan products
Automated so|ut|on to move accounts under subvent|on products to non-subvent|on products on the spec|fed date
(subvention end date)
lnput data entry screen to enter data re|ated to the ATM access
On||ne tax account|ng system (O|TAS}, e|ectron|c account|ng system |n exc|se and serv|ce tax (EASlEST} |mp|emented |n a||
designated branches
lntegrated treasury software for domest|c and forex treasury operat|ons |mp|emented
HRM software to automate HR-re|ated act|v|t|es |mp|emented; centra||zed process|ng of sa|ary, pens|on, depos|t process|ng,
clearing operations for both inward and outward clearing
Automated performance appra|sa| systems
0
1
2
3
4
5
6
7
8
7 7.2 7.3 7.8
lNDlA BRAZl| lTA|Y S
Payment F|ows (t|mes of GDP}
Figure 17: Payment Flow as times of GDP
41
THE GROWTH TREND
Peak volume of RTGS transactions, increased to 248000 transactions
in 2010, compared to 128000 transactions in 2009
NEFT volume of transactions processed has increased to 13.5 mn in
February 2011
43 |
Financial Inclusion (FI):
Fl enta||s de||ver|ng of fnanc|a| serv|ces at affordab|e costs
to disadvantaged and low income segments of society. It is
addressing the last mile issue through various technology
alternatives like mobile banking, conventional cards, smart
cards, Common Service Centres, low cost ATMs, hand held
devices etc.
Key facts:
45.9 mn farmer househo|ds |n the country (51.4%}, out of a
total of 89.3 mn
43
households do not access credit, either from
institutional or non-institutional sources
Desp|te the vast network of bank branches, on|y 27% of tota|
farm households are indebted to formal sources (of which one-
third also borrow from informal sources
The primary models, which include the key stakeholders, adopted
by banks to establish a linkage with the excluded populace are:
Bus|ness correspondents (BOs}
Se|f he|p group ||nkage
Branch|ess bank|ng - mob||e vans
Bu|k |end|ng to MFls
Mob||e-based - M-Pa|sa and lMPS
Most banks have a set up a separate lT |nfrastructure for fnanc|a|
inclusion. There are systems geared for low-value high-volume
transactions with implementations varying from 500 to 1,500
transactions per second.
The techno|og|es dep|oyed for fnanc|a| |nc|us|on are:
B|ometr|c smart card
Handhe|d b|ometr|c POS dev|ce (w|th |oca| |anguage
incorporation functionality) for authentication and transaction
GPRS-enab|ed mob||e phones
Oore bank|ng so|ut|on
Other lOT too|s used for fnanc|a| |nc|us|on are: PO-KlOSK,
Finger printing devices, Point of transaction terminal (POT)
Following are few pointers towards the future trends:
lncreased effort from banks to cover the unbanked popu|at|on
through the BC and SHG route
lssue of a smart card to the farmer on wh|ch a|| h|s transact|ons
are recorded, a hand-held terminal with the BC (Business
Correspondents) at the village level and a Central Processor
Unit (CPU) linking the smart cards and BC terminals with the
banks has emerged as the most apt solution
Extens|on of bank|ng outposts to remote |ocat|ons w|thout
having to open bank branches in the area due to recent
developments in banking technology and expansion of
telecommunication network in the hinterlands of the country
lncrease |n Mob||e rem|ttance and transfers from the m|gratory
labour
Key Challenges for ICT in Banking:
While technology-focused possibilities of IT for banking may be
unlimited due to their application and adoption in India, to re-
engineering of existing practices and procedures to capitalize
effectively on IT, a conscious approach is recommended.
Following are some key challenges for IT in banking sector:
Secur|ty / Fraud: The e||m|nat|on of manua| records w|th the
introduction of electronic funds transfers and ATMs. This
|nc|udes |ssues re|ated to the confdent|a||ty of |nformat|on,
prevention of data corruption and cyber crime.
Oosts: lT |n|t|at|ves usua||y consume a |ot of cap|ta| expend|ture
for banks and the benefts are rea||zed over a per|od of many
years to come.
Res|stance to change by emp|oyees: lt has been observed
that large technology initiatives usually face a lot of resistance
to change and low acceptance by the employees and therefore
become the main reason for the failure of such implementation.
The goa| to prov|de fnanc|a| serv|ces to 50 percent (56 m||||on} of
the excluded rural cultivar and non-cultivator households across
different states by the year 2012 and 100% coverage (112 mn) by
year 2017 has been stipulated by the RBI.
THE MAIN TECHNOLOGY PARTNERS OF VARIOUS
COMMERCIAL BANKS WHICH ARE PROVIDING THE
ICT SOLUTIONS FOR FI ARE:
A Little World
FINO
EKO
TCS
N-logue Communications Pvt. Ltd.
NCDEX
Integra Micro Systems
43
UNDP workshop 2011 Background Note
42
Rangrajan Committee Report
Farm house-holds not accessing credit from formal sources as
a proport|on to tota| farm househo|ds |s s|gn|fcant|y h|gh |n the
North Eastern, Eastern and Central parts of the country
42
. Thus,
apart from the fact that exclusion in general is large, it also varies
widely across regions, social groups and asset holdings. The
poorer the group, the greater is the exclusion.

| 44
Security has long been a hot point of debate among enterprises,
SMEs and consumers. From physical security to Web 2.0
security, there are alarms and concerns raised by one and all.
Web 2.0 in particular has suffered major losses in the past due to
security issues. Since the boom of social networking, there has
been a sharp increase in online attacks.
The secur|ty |ndustry can be c|ass|fed as:
1. Electronic Security and Surveillance Solutions
2. IT Security
In recent times, India has featured consistently on the top of list of
the countries, where activities/incidences related to security breach
are high.
2.7. Security
45 |
Surveillance and Security solutions have become of paramount
importance because of insurgency and terrorism becoming
a global phenomenon. With the traditional security platforms
being inadequate to address these new challenges, there is an
emerging need to move to intelligent electronic security solutions.
Indias electronic security market has grown from USD 135 mn
44

in 2006 to USD 350 mn
45
in 2010. Currently the domestic market
for electronic security products and services is estimated at USD
400-450 mn.
46
As per industry sources, the market is expected to
grow at 25-30%
47
, higher than many other developed countries,
in coming years.
The Indian market is largely import driven. Large numbers of
Indian companies have collaborated with foreign manufacturers
for marketing foreign products in India. Security equipment is
being imported primarily from USA, UK, Germany, Singapore,
Italy, Hong Kong, Israel, Japan, Korea, China, and Taiwan.
Electronic Security Market in India can broadly be divided into
fve categor|es.
1. CCTV/video surveillance systems
2. Access control systems
3. Intrusion Detection systems
4. Electronic article surveillance
5. Fire detection and alarm systems
The largest amongst these is the CCTV segment, commanding
some 55% of the entire market with annual growth rate of
around 45 %. Fire detection is also growing at good pace due to
rap|d res|dent|a| construct|on requ|r|ng fre detect|on and a|arm
equipment.
Access Control systems (e.g. Biometric Reader) which recognize,
authenticate and authorize entry to the premise thereby ensuring
ultimate protection for premise, staff and assets account for about
30% of the Indian Electronic Security market share. While access
regulation is desirable, the cost factor is restricting the installation
of good access controls systems to only large organizations.
Intrusion Detection Systems unlike the rest of the world has not
found a very good market in India presumably due to lack of
awareness as well as education. The majority of installations are
purely residential. The market is expected to increase with the
increase in nuclear families.
Other equipment like Metal Detectors, X-Ray scanners and
baggage scanners command about 11% of the market share.
With growing security measures by Government, this segment is
expected to grow by about 30% annually.
Growth Drivers
The growth outlook for the electronic security industry in India is
very promising driven by:
Terror|st and lnterna| Secur|ty Threat: lncreased demand from
Government and sectors like Aviation, Power, Infrastructure,
Transport, Government and Oil & Gas
Rap|d deve|opment |n |nfrastructure
Grow|ng demand from Oommerc|a| centres such as hote|s,
shopping malls, multiplexes and Booming Retail sector
Fa|||ng of pr|ces of e|ectron|c systems
|ow lmport Duty- Oompared to the proh|b|t|ve 250% lmport
Customs Duty of the 80s, the current rate of 35% is also
considered as growth driver for the industry.
Government`s |ncreased expend|ture on Secur|ty
Challenges
The key challenges faced by the industry are:
Oompet|t|on from cheaper products from countr|es ||ke Ta|wan,
China and other countries in the South-East Asia
Prov|d|ng Oost effect|ve and affordab|e home/bus|ness secur|ty
solutions would be important to capture Indian Market which is
price sensitive
Oustom|z|ng g|oba| techno|ogy p|atforms to su|t lnd|an
conditions and requirements
Absence of a nat|ona| secur|ty strategy
Awareness regard|ng ava||ab|e Techno|ogy So|ut|ons
With the rapid growth of ICT sector in India in last decade,
security solutions industry has also evolved to address security
concerns faced by industry. Security management is becoming
the biggest challenge considering that the threats are becoming
increasingly sophisticated.
2.7.1. Electronic Security & Surveillance
The market is highly fragmented and organized players comprise
only 20% of the market but account for 80% of the revenues
KEY PLAYERS
Z|com, Honeywe||, S|emens |td., H|tach|, Godrej Secur|ty So|ut|ons,
ADT-Tyco Security, Digitals India Security Products
44
Honeywell Security
45
Security Today
46
ADT Security, 2011
47
RNCOS Industry Research Solutions

| 46
The Indian IT security market in 2006-2007 was USD 46.8 mn
48
,
and by 2010 end, it surged to USD 464.4 mn on account of
increased demand from business sector and continuous IT
development in infrastructure. The continuing BPO boom and
rising emphasis on compliance with IS guidelines and regulations
such as HIPAA and the Sarbanes-Oxley Act by Western clients
are other key factors supporting growth in the Indian security
software solutions market.
Security Market is dominated by few large players. Symantec,
McAfee and Checkpoint happened to be the top three security
solution vendors in India in 2009
49
.
Table 15: Indian Security Market
Data Quest Estimate, 2010
The overall information security market
50
is split into security
products and security services.
Indian Security Products Market
Security Product market accounts for 80% of the security market
|n lnd|a. Wh||e the product c|ass|fcat|on encompasses network,
content, end point, data and wireless security, the network
security market can be further segmented into categories such
as Firewall/IPSec UTM, VPN; SSL VPN; and IDS IPS.
Data security segment has huge growth potential. With 3G and
WiMax technology setting in, telecom operators now need to
handle voice and data security threats from hackers, viruses,
trojans, etc.
Security Product Market 2009-2010
Indian Security Services Market
Security services market is growing at a faster rate and is
expected to increase its contribution to IT security market next
few years. Large enterprises contribute more than 80% to the
overall security services market in India as compared to the
contribution by SMEs. According to Gartner, it is being seen
that core MSS (managed security services) provider offerings is
becom|ng standard|zed across the As|a Pac|fc reg|on, wh||e |oca|
market conditions in this region continued to drive specialized
solutions and packaging.
Security Services Market 2009-2010
In recent times, India has featured consistently on the top of list of
the countries, where activities/incidences related to security breach
are high.
IT and BPO, BFSI and Government have been early adopters
of security solutions in India, boosting growth in the countrys IT
security industry.
2.7.2. IT Security Solutions
LEADING VENDOR IN NETWORK SECURITY
- Cisco
- Check Point
- Juniper
- Sonic Wall
- Fortinet
- McAfee
- Tipping Point
- Elitecore (Cyberoam)
66%
Network Secur|ty
Oontent Secur|ty
34%
Figure 18: Security Product Market in FY10
Figure 19: Indian Security Services Market: Share of Companies
Data Quest Estimate, 2010
Wlpro lnfotech, 17%
Datacraft, 25%
S|fy, 9%
Pa|ad|on, 6%
Others, 14%
HO|, 29%
2008-09 (USD MN) 374
2009-10 (USD MN) 388
FY09 (USD MN) 84
FY10 (USD MN) 91
FY09 (USD MN) 1304
FY10 (USD MN) 1340
48
Report-Global IT Security Market Forecast to 2012
49
IDC
50
Frost & Sullivan report
47 |
48
Report-Global IT Security Market Forecast to 2012
49
IDC
50
Frost & Sullivan report
lNDlA RSSlA THAl|AND TRKEY vlETNAM
0
2
4
6
8
10
12
Growth Driver & Potential
ln lnd|a, secur|ty spend |s s|gn|fcant|y sma||, approx|mate|y 1-2
% of total IT budget in comparison to the worldwide, corporate
spend between 2.5%
51
to 8 % of their total IT budget. This
illustrates a tremendous potential to make executives security-
aware and help them build their security infrastructure.
Some of the trends driving growth of IT security Industry in India
are as follows:
Rap|d|y grow|ng broadband popu|at|ons and re|at|ve|y new
and expanding Internet infrastructures has an increased risk
of malicious activity and hence security protocols and measures
would be required. Currently India leads
52
the Asian market in
terms of spams
lncreased on||ne terror|sm and threats |s forc|ng governments
to have security as the most important aspect of governance
Present|y SMEs contr|bute to around one-th|rd of the network
security market; this contribution is expected to rise over the
next few years w|th |ncrease |n focus on frst |ayer per|meter
defence
53
.
E-Ma|| Secur|ty Boundary and Secure Web Gateway w||| st|||
be the highest growing sub segments among SMEs. The SMEs
segment is projected to spend around 44-48% of the total IT
spending in the country from 2010-2012.
Enterpr|ses are rea||z|ng the need for secur|ty to go beyond
single point solutions such as anti-virus, anti-spam and content
f|ter|ng to more ho||st|c su|te so|ut|ons such as data encrypt|on,
endpoint security and data loss prevention (DLP).
Due to the |ncrease |n on||ne e-commerce transact|ons,
increasing data thefts, and maturing attacks, security solutions
are turning up as a need of the hour.
Demand from var|ous |ndustry vert|ca|s such as BFSl, te|ecom,
healthcare automotive, manufacturing, and defence is expected
to further fuel the growth of the ICT Security industry.
Regu|atory and comp||ance norms a|so seem to be dr|v|ng the
heightened adoption of security solution.
Challenges
Oomp|ex network make |mp|ementat|on d|ffcu|t
|ower adopt|on |n SMEs due to econom|c and budget
constraints. SMEs typically view security more as a cost centre
rather than as an investment
|ow penetrat|on of lT |nfrastructure |n SMEs
|ack of awareness and referab|e c||ents
|ack of awareness of product ava||ab|||ty and |ow threat
perception on consequences of data loss
|ack of any k|nd of mandates |n terms of regu|atory comp||ance
and legal framework is a major barrier for the next phase of
growth to take off.
Government Initiative
The lnformat|on Techno|ogy Act 2000 prov|des |ega| recogn|t|on
for electronic data interchange and other means of electronic
communication.
OERT-ln (lnd|an Oomputer Emergency Response Team},
operational since 2004, is national nodal agency for responding
to computer security concerns. In recent Information
Technology Amendment Act 2008, it has been designated to
serve as national agency to perform the following in the area
of cyber security:
- Collection, analysis and dissemination of information,
forecasts and alerts about cyber incidents
- Taking emergency measures and do coordination
among various stakeholders
India features among the countries where malware, spam, or
anything that comes with a virus or Trojan attachment is the most
common.
RBI prescribed guidelines to Banks on Data security is driving
higher adoption of security solutions such as encryption, two factor
authentication and Data loss prevention (DLP).
Despite the slow growth, due to economic slowdown last year, the
Indian IT security market is forecast to grow at CAGR of more than
20 percent in 2010-13. The growth momentum is likely to remain
inclined towards the service side, where most of the solution
providers will target managed services.
Figure 20: Global Spam Scenario
51
MIEL e-Security Pvt. Ltd.
52
McAfee Threats Report
53
Frost & Sullivan, ICT Practice, South Asia and Middle East

| 48
The Department of lnformat|on Techno|ogy, Government of
India has issued a discussion draft on National Cyber Security
Policy
54
on 26th March 2011 and is in the process to enact IT
security policy in India.
The recent government has taken an |n|t|at|ve for creat|ng a
root cert|fcat|on author|ty wh|ch w||| |ssue d|g|ta| cert|fcates
that would ensure secure commercial transactions.
INDUSTRY INITIATIVE
Data Security Council of India (DSCI) has been set up by NASSCOM
to meet IT security concerns in Indian context. DSCI is envisaged as
a credible and committed body to uphold a high level of data privacy
and security standards.
54
www.mit.gov.in/sites/upload_fles/dit/fles/ncsp_060411.pdf
| 49
55
www.penn-olson.com/2011/03/19/e-commerce-in-india-to-hit-10-billion-this-year/
56
www.exchange4media.com/e4m/izone1/izone_fullstory.asp?section_id=4&news_id=43449&tag=35943
E-commerce or Electronic Commerce market in India is in a
nascent, but experiencing high rate of growth. Indian market is
expected to grow in double digits over the next few years. The
Indian E-commerce industry is expected to be USD 10 bn55 in
2011, having a grown at a CAGR of 41.1% over the past 5 years.
The E-commerce business is largely dominated by online travel
industry, followed by E-Tailing (online retail of electronics) and
fnanc|a| serv|ces. Wh||e the |ndustry has grown at a OAGR of
more than 40%, it is estimated that the retail segment itself has
grown 3 times as fast
56
. The industry is expected to register over
100% growth for the next few years.
2.8.1. E-Commerce
KEY PLAYERS
Some major players are itctc.co.in, makemytrip.com, cleartrip.com,
yatra.com, snapdea|.com, f|pkart.com, |etsbuy.com, shaad|.com,
bharatmatrimony.com, sharekhan.com, magicbricks.com, 99acres.
com, naukri.com, monster.com, etc
80%
On||ne Trave|
7%
E-Tra|||ng
6%
F|nanc|a| Serv|ces
2%
D|g|ta|
Down|oads
5% Others
Figure 22: E-market Sectoral Share
Figure 21: E-commerce Market in India
55

E-Market Sectoral Share, 2010
E-Commerce Market in India
0
2000
4000
6000
8000
10000
2007 2008 2009 2010 2011F
I
n

U
S
D

m
i
l
l
i
o
n
s
Source: Industry
Estimates
2.8. Others

50 |
Growth Drivers
The trend of order|ng products on||ne |s defn|te|y ga|n|ng
momentum because of the following factors:
Grow|ng M|dd|e O|ass - The r|se of lnd|a as an econom|c
powerhouse has given rise to a very large empowered middle
class which is not averse to trying new technologies and ideas.
Oonven|ence Factor - E-commerce espec|a||y |n trave|
bookings saves time, reduces transaction cost and leads to
better decision making by offering more choices - thus radically
altering the booking/shopping experience.
|ower|ng cost and |ncreas|ng penetrat|on of PO`s and
broadband services
lncreas|ng Penetrat|on of Ored|t/Deb|t Oards/lnternet Bank|ng
Credit/debit cards and internet banking are single biggest
facilitators in increasing the reach of E-commerce. Moreover,
the penetration of credit cards itself has increase tremendously
over the years, and is predicted to maintain this momentum.
Major Challenges
A developed ecosystem for e-commerce does not exist as is
the case in other international markets. Most companies are
reinventing their processes and business model at every stage,
rather than adopting successful models from the west, and thus
the environment remains quite challenging. The most prominent
challenges are:
Backward De||very systems/|og|st|cs lnfrastructure and poor
customer service
Bu||d|ng Trust |n the Oaut|ous lnd|an Buyer:
Pr|m|t|ve Payment gateways systems
|ack of appropr|ate backend management systems (warehouse
management. ERP etc) which can be customised for operations
in India
NEW CATEGORIES
The product categories on e-commerce are expanding and now
several sites are offering apparels, accessories for men and women,
health and beauty products, vehicles, Software, consumer electronics
as product categories.
Flipkart, a popular e-commerce site started off with only book, but later
expanded to all the popular categories now even offers health care and
home appliances as product categories. It received venture funding of
USD 10 mn in 2010
| 51
Governments across all the levels in the country- central,
state and local bodies- have been inducting Information and
Communication Technology (ICT) to provide citizens and
organizations with faster, accurate and convenient access to
government information and services.
E-Governance is a viewed as a strategic tool for transforming the
standards of governance and improving the quality of services
provided by the government to its people. To attain these goals,
the Government of India has launched the National e-Governance
Plan (NeGP) in 2006 with a budget of USD 2.6 bn in 2009
57
.
The total public sector expenditure on IT was around USD 3.38
bn in 2009. Half of this spending was on hardware, followed by
IT Services (30 per cent) and software (20 per cent).
57

Growth Trend
The Government started seriously focusing on interacting
and delivering public services to the general public using
e-Governance only after 2003. The E-Governance spending in
India has increased from USD 0.5 bn in 2003
58
to USD 8 bn i.e.
3% of annual budget in FY11. The overall e-government market
potential in India is expected to worth USD 26.043 bn.
59

Market Structure
The NeGP comprises of 27 Mission Mode Projects (MMPs).
An MMP |s project |dent|fed by the government w|th c|ear
objectives and scope with measurable outcomes and timelines.
An MMP can be headed by any Ministry of the Central or State
government or by the Planning Commission.
61
A comprehensive
list of MMPs can be found in the appendix.
Apart from the MMPs government is taking up projects of
capacity building for e-governance and for increasing the
penetration of Computers and broadband
62
.
Demand Drivers
Traditionally, the public services and delivery systems in India
have been |neffc|ent, opaque and prone to mass|ve |eakages.
In a democratic system, this has lead people to aspire for
governments that can provide better systems. The governments
have responded by tak|ng severa| |n|t|at|ves |n the fe|d of
e-governance. The public pressure for transparency and the
emergence of private sector in India (global IT hub) have been
the biggest driver for E-governance reforms.
The government designs its socialist programmes with an aim
to attain inclusive development and reaching out to the marginal
sections of the society is critical for the success of these
programmes.
The use of ICT enhances the reach of government and is one
of the key drivers for the governments to adopt ICT solutions.
Major Challenges
While there is a clear government urge and dedication to
e-governance schemes, there are several challenges, which are
required to overcome:
lnd|a has a popu|at|on of 1.2 b||||on. Ro|||ng out new serv|ces or
upgrading old services for such a large user base is the biggest
challenge.
The penetrat|on of persona| computers (3.17 per 100 peop|e}
and internet (6.9 per 100 people) is low in India
63
. The situation
is even worse in rural areas where around 70 % of the population
resides
Mu|t| - Party Democracy and more than 24000 |oca| bod|es
lead to different systems across the country. The multiplicity in
systems makes |t d|ffcu|t to standard|se |arge projects.
|ower |eve|s of ||teracy and computer-savv|ness severe|y
restricts effectiveness of e-government projects
2.8.2. E-Governance
KEY PLAYERS
Amongst the leading service providers in India, IBM, HP, Microsoft,
TCS, Wipro, HCL, 3i InfoTech, Patni systems, Infosys
60
and Mahindra
Satyam are active in e-government programmes.
59
20%
30%
50%
Hardware lTes Software
Total Expenditure USD 3.38 bn
Figure 23: Public Sector Spending on IT

52 |
Key Initiatives
Ko|kata based hosp|ta| |everages e-governance for trop|ca|
medicine. The hospital employs tele-medicine to assist doctors
|n rura| areas as they ana|yze and treat res|dents from far fung
districts.
The Karnataka government`s 'Bhoom|` project has |ed to the
computerization of centuries old system of handwritten rural
|and records. The project |s expected to beneft seven m||||on
villagers in 30,000 villages.
ln Gujarat there are webs|tes where c|t|zens can |og on and get
access to concerned government department on issues such
as land, water and taxes
ln Hyderabad, through e-Seva, c|t|zens can v|ew and pay
bills for water, electricity and telephones, besides municipal
taxes. They can a|so ava|| b|rth / death cert|fcates, passport
applications, permits / licenses, transport department services,
reservations among other things.
GOVERNMENT INITIATIVES FOR ICT
IN AGRICULTURE
AGRISNET
AgRIS
AGMARKNET
DACNET
DAIC
ARISNET
E-Sagu
Commodity Portals
E-Networking of labs
57
business.rediff.com/report/2009/oct/02/tech-big-opportunities-in-indian-it-market.htm
58
articles.economictimes.indiatimes.com/2004-11-05/news/27402631_1_e-governance-initiatives-e-service-delivery-citizens-service-facilitation-centre
59
UK Trade & lnvestment Sector briefng: lCT Opportunities in lndia
60
www.mydigitalfc.com/opportunities/infosys-bags-e-governance-project-worth-rs-5000-cr-789
61
www.mit.gov.in/content/mission-mode-projects
62
www.indg.in/e-governance/e-governance/egov-plan
63
Survey of ICT for Education in India and South Asia, Extended Summary by PwC
| 53
GOVERNMENT INITIATIVES FOR ICT
IN AGRICULTURE
AGRISNET
AgRIS
AGMARKNET
DACNET
DAIC
ARISNET
E-Sagu
Commodity Portals
E-Networking of labs
Agriculture is the main occupation of the majority of rural
households in India, a bulk of which comprise tiny land
holdings. Though 58.4%
64
of the population of India depends
on agriculture, the contribution of agriculture to the GDP of India
was only about 14.6%
65
in FY10 (at 2004-05 prices) and in the
past several decades the sector has grown slowly.
Farming in India is being undertaken by a large section of
population under extremely diverse conditions. Most of these
farmers are small and marginal who do not have access to
relevant and timely information that could reverse the adverse
affect on agricultural growth and productivity.
ICTs play a key role in improving the availability of agricultural
production and market information in developing countries. ICTs
can help smallholder farmers maximize the return, by providing
them timely and relevant information in the following areas:
1. Access to experts in real time for Agri and Crop Advisory
2. Weather Forecasts and Alerts
3. Pest Information, Alerts and remedy
4. Market Price information in real time
5. Information on farm credit and subsidies
6. Information on Global Best Practices
There are ICT options in Agriculture each having its own pros
and cons:
Computer-based information systems require
Internet connectivity and hence heavy infrastructure.
SMS-based information systems are easy to
implement and work on all mobile phone models.
Voice-based information systems are easily
accessed by mobile phones and they work above the constraints
of illiteracy and local language support as faced by SMS solutions.
ICT Initiatives in India
mKrishi - Tata Consultancy Services (TCS)s mKrishi is a
proprietary mobile agro-advisory system that allows farmers
to send queries to agricultural experts in their local languages
through a mobile phone and receive personalized advice or
relevant information in the local language.
eChoupal
66
- ITCs eChoupal initiative enables rural Indian
farmers to enhance the|r effc|ency through pr|ce transparency
over the Internet. Launched in June 2000, e-Choupal, has
already become the largest initiative among all Internet-based
interventions in rural India. Solution has been scaled up to reach
40,000 villages, covering 4 million farmers in 10 states. It has
6,500 k|osks, w|th each k|osk serv|ng fve or s|x v|||ages.
Tele-services-Kisan Sanchar Limited (IKSL), a subsidiary of
Indian Farmers Fertilizer Cooperative Limited (IFFCO), along with
Bharti Airtel-Indias leading mobile network operator- provides
mobile tele-services to the rural farmers.
Challenges for ICT implementation
in Agriculture in India
The prob|ems encountered wh||e sett|ng up and manag|ng
these ICT initiatives such as e-Choupals are primarily of
infrastructural inadequacies, including power supply, internet
connectivity in rural areas etc.
There |s a|so cha||enge of |mpart|ng sk|||s to the frst t|me |nternet
users in remote and inaccessible areas of rural India.
l|||teracy |s an obstac|e |n success of lOT so|ut|ons such as SMS
based solutions
Oreat|ng so|ut|ons |n |oca| |anguage |s a|so a cha||enge
|ack of standard|zat|on and non ava||ab|||ty of re|evant content
ICT OPTIONS IN AGRICULTURE
- Touch Screen Kiosk
- Computer based
Information Systems
- Smart-phone based
Applications
- Radio based broadcasts
- Voice based mobile
solutions &IVRS
- SMS based mobile
messaging systems
- Community Video Programs
- Tablets based Information
Systems
2.8.3. Agriculture
GOVERNMENT INITIATIVES FOR ICT
IN AGRICULTURE
AGRISNET
AgRIS
AGMARKNET
DACNET
DAIC
ARISNET
E-Sagu
Commodity Portals
E-Networking of labs
64
National Portal of India, 2010
68
Ministry of Agriculture, Government of India
66
ITC Website

54 |
Bioinformatics is the application of computer science and
|nformat|on techno|ogy to the fe|d of b|o|ogy and med|c|ne.
Computers are used to gather, store, analyze and integrate
biological and genetic information which can then be applied to
gene-based drug discovery and development. Data management
tools based on bioinformatics have helped pharmaceutical
companies in easing the task of R&D analysis, thereby enhancing
their productivity by way of identifying new biomarkers for toxicity
and drug effcacy, d|agnost|c b|omarkers as we|| as new drug
targets.
The Indian bioinformatics market
67
in India derives large part of
its revenue from outsourcing activities. Driven by the lower wage
costs for skilled manpower, and lower infrastructure costs, the
Indian bioinformatics outsourcing services is estimated to grow at
25% and has reached USD 62 mn in 2010. Based on the current
market outlook, the Indian bioinformatics market is anticipated
to grow at a CAGR of around 10%
68
between FY 11 and FY13.
The Indian bioinformatics industry comprises of vendors
with origins in the life sciences domain or the IT domain.
Bioinformatics market is segmented into Analysis Software &
Services Market, Content Market, and IT Infrastructure & Other
Services Market. It can also been segmented on the basis of
applications into Genomics, Proteomics, Pharmacogenomics,
and Drug Discovery market.
While Pure play companies, Ocimum Biosolutions and Strand
Life Sciences have the highest level of specialization and focus
on bioinformatics, Indian and multinational IT companies such
as IBM, Mphasis, TCS, HCL Technologies, and Infosys are less
focused on the life sciences vertical. Avesthagen and Jubilant
Biosys are CRAMS companies also offering bioinformatics
services. Their level of specialization and focus is higher than
(domestic and multinational) IT companies but their core business
is contract research and/or manufacturing.
While Non-Standardization of Service Platforms & Modular
Systems, varying data formats used by Life science companies
are the challenges, focus on select niche areas could prove to be
benefc|a| for p|ayers.
2.8.4. Bio-Informatics
DOMESTIC
PURE PLAY
DOMESTIC IT
DOMESTIC
LIFE
SCIENCES
MULTINATIONAL
IT
MULTINATIONAL
PURE PLAY
Data Mining/Analysis High High High High Low
Data Visualisation High Medium Medium Low Nil
Data Integration Low Medium Low Nil Nil
Data Creation Low Medium High Low Nil
Cheminformatics Medium Low Medium Nil Nil
Consulting Low Low Low Nil Low
Customised Software
Development
Medium Low Medium Low High
Customisation of Products Low Nil Low Nil Low
LIMS Low Medium Low Medium Low
Clinical Trial Informatics Nil Medium Nil High Nil
Table 16: Bioinformatics Vendor capabilities by category in India
67
ValueNotes / KnowGenix report Dec,07- Bioinformatics Outsourcing for Life Sciences India Opportunity
68
Report Global Bioinformatics Market Outlook2011 by RNCOS
| 55
SECTION III. Opportunities for Swiss SMES
SECTORS KEY OPPORTUNITY RELEVANCE FOR SWISS SMES OBSERVATIONS
Animation &
Gaming
Oustom content deve|opment
Mu|t|med|a/ web des|gn
An|mat|on enterta|nment
An|mat|on educat|on
vF
Software for Mob||e Gam|ng
Th|s |s re|at|ve|y sma|| |ndustry
in Switzerland.
Outsourc|ng opportun|ty to lnd|a
ex|sts for Sw|ss frms to become
more cost competitive.
|ack of str|ngent ant| p|racy |aws
and IPR protection in India would
be a key challenge in this segment
while outsourcing to India.
Automation W|re|ess Systems
lndustr|a| Automat|on
Bu||d|ng So|ut|ons
Home Safety & Secur|ty
Offce Automat|on
Scann|ng & Mob|||ty
Robot|cs- Oontro||ers
and Software
H|gh|y deve|oped Sw|ss Sector,
which refers to the production
of physical and electronic parts
making up a computer system
and the interaction between
users and computers by
interfaces. It encompasses
fast-developing technologies
such as art|fc|a| |nte|||gence,
enhanced reality and the creation
of intelligent interfaces.
These are grow|ng segments |n
lnd|a and have s|gn|fcant potent|a|
if positioned well. Swiss
companies strong presence in
high technology niche segments
such as micro and
nanotechnologies, nuclear
techno|ogy cou|d be s|gn|fcant
value addition for Big Indian IT
players.
There |s a|so s|gn|fcant opportun|ty
of Technology Transfer /
Oo||aborat|on w|th lnd|an frms.
Bioinformatics B|o|nformat|cs consu|t|ng-
proteomics database and
analysis tools, software systems
in the functional genomics area
etc.
Outsourc|ng b|o|nformat|cs
services to India
Sw|tzer|and has a r|ch
bioinformatics cluster fueled by
universities researchers,
informatics specialists,
Govt. Support and thriving
pharmaceutical industry.
Computational Genomics, mass
spectrometry characterization
of proteins and small
molecules, proteome imaging,
3D visualizations and simulations
of Life Sciences Nano-
biotechnology are strengths of
Swiss Firms
Advanced research app||cat|ons
in Bioinformatics could add value
to Indian Biotech/Pharma sector.
Opportun|t|es to enter lnd|an
Market in niche segments such as
Data Visualization &
Cheminformatics
Sw|ss SMEs are Good Acqu|s|t|on
opportunities for Big Indian
IT players interested in entering
Bioinformatics segment
e-Governance
(Education &
Others)
D|stance |earn|ng
Bu||d|ng lOT lnfrastructure
n|que ldent|fcat|on Number
Other Government funded
ICT Projects
Sw|tzer|and has successfu||y
implemented Governance
projects such as e-connection of
schools in 2007 and
|earn|ng cou|d be he|pfu| for
implementing Indias ICT initiative
in Education. JV with an
estab||shed lnd|an frm wou|d
be a good way to venture in to
Government Projects in India.

56 |
Finance, Banking
and Insurance
Wea|th Management (e-Portfo||o}
Software for bank|ng secur|ty;
secure data transfer; Fraud
Detection; risk management;
lending and mortgage
management etc
lOT systems for reta||
banking core systems and
channels; e-Banking; customer
management
SMART card and EFTPOS
/ point of sale equipment and
systems
lnsurance Products- po||cy and
claims servicing
Bus|ness process management
(BPM)
Sw|tzer|and has estab||shed BFSl
ICT sector and can offer
products/ services required in
Indian BFSI sector for its next
phase of growth targeting Public
Sector Banks/ Rural Banking/
Small and medium Banks,
Financial Institutions.
Sw|ss frms cou|d br|ng
innovative technology solutions
in the domain of mobile banking,
smart card, banking data
security, rural connectivity.
|aunch of 3G recent|y |s prov|d|ng
higher data transfer rate; adding
to its quick-win solutions through
mobile application is expected
to bring potential growth in mobile
banking and insurance industry in
India.
Oo||aborat|on w|th lT frms |n lnd|a
could be a way to access BFSI
opportunity.
Healthcare Te|emed|c|ne Dev|ces
Med|ca| Equ|pment & Dev|ces
Hosp|ta| lnformat|on System
Hea|th lnsurance
O|oud Based Serv|ces
E-Hea|th
Hea|thcare |s an estab||shed
industry in Switzerland hence
ICT products/ services are
already tested
R&D Oo||aborat|on |n advanced
research areas-Stem Cell,
Nanotechnology
Huge Growth Prospects |n lnd|a
due to possibility of Rural
Penetration
Pr|c|ng of Product or serv|ce wou|d
be key for capturing Indian SMEs
attention
|oca| Oustom|zat|on of ex|st|ng
solution would be a challenge
Manufacturing
(Automotive/
Electrical etc)
Software app||cat|on (e.g. OAD/
CAM) for designing automobiles,
components and equipment.
App||cat|ons for MRP,
ERP systems, supply-chain,
management
lT Ana|yt|cs for |mproved
business performance (BI)
Swiss IT service Providers provide
the services
Des|gn Deve|opment
Operat|on
Packaged software
lOT Systems & Networks
lOT app||cat|on among lnd|an
Manufacturing SMEs is increasing
pr|mar||y due to br|ng effc|ency and
meet global standards. SME needs
however may be based on local
market requirement hence
suggested way, to capture this
market, is by having a local partner.
RFID (Radio
Frequency
ldent|fcat|on}
lmp|ementat|on of RFlD |n
Various Industry Segments
Bespoke, Oost compet|t|ve
solutions to SMEs in India
S|gn|fcant |oca| exper|ence of
Swiss Companies in RFID software
applications. Solutions provided in
following areas:
lntegrated c|rcu|t des|gn
Dev|ce deve|opment
Software |ntegrat|on
F|e|d |nsta||at|on
A grow|ng opportun|ty |n lnd|a
primarily to track, manage and
optimize manpower or product
movement.
Reta||, |og|st|cs, Supp|y
Chain, Healthcare, Security and
Government are expected to give
this an impetus in India.
| 57
Security lnfrastructure Secur|ty (A|rport,
Rail, Maritime)
Per|meter lntrus|on Detect|on
lndustr|a| Secur|ty
lntegrated surve|||ance systems
Pub||c Events
Government
Data Secur|ty
Encrypt|on systems
Automated threat detect|on
S|gn|fcant Sw|ss expert|se
in Technologies devoted to the
security of persons, goods and
data, management of
|dent|fcat|on systems
(fngerpr|nts, |r|s, RFlD} as
we|| as the secur|ty of fnanc|a|
transactions.
lntegrated So|ut|ons are
developed using acoustic,
seismic, infrared imaging, video
imaging, radar sensors and other
technologies.
W|th the advent of techno|ogy and
rise in level of terrorist attacks, the
traditional methods of surveillance
and security are inadequate,
and hence the rising need to
adapt advanced technology- in
India. 4G wireless technology for
security installations is the next big
opportunity in India.
Telecom va|ue Added Serv|ces (m
commerce)
Broadband Growth
3G & W|MA techno|og|es
Green Energy for Te|ecom lnfra
Mob||e Bank|ng & Payment
Solutions
Mob||e med|a
D|g|ta| Down|oad
Sw|ss compan|es have a
developed and saturated telecom
segment. Growth is driven by M
commerce and Mobile media
Key Areas-Secur|ty so|ut|ons |n
m - commerce, data
transportation through mobile,
application of cloud computing,
mobile multimedia solutions
Wh||e |t wou|d be d|ffcu|t to enter
mobile telephony market due to
stiff competition, opportunities
could be exploited by creating
innovative solutions/products for
telecom vendors in India.
Table 17: Opportunities foe Swiss SMEs

58 |
India has successfully reformed all the constituents of the
Information Technology, Internet and Communication Industry.
Being a signatory to the Information Technology Agreement
of the World Trade Organization, the customs duty on all the
spec|fed 217 |tems has been e||m|nated, from March 1, 2005.
Industrial Approval Policy
Industrial Licensing has been virtually abolished in the Electronics
and Information Technology sector except for manufacturing
electronic aerospace and defence equipment. There is no
reservation for public sector enterprises and private sector
investment is allowed in almost all sectors. Electronics and
Information Technology industry can be set up anywhere in the
country, subject to clearance from the authorities responsible for
control of environmental pollution and local zoning and land use
regulations.
Foreign Investment Policy
A foreign company can start operations in India by registration
of its company under the Indian Companies Act 1956. Foreign
equity in such Indian companies can be up to 100 per cent. At
the time of registration it is necessary to have project details,
local partner (if any), structure of the company, its management
structure and shareholding pattern.
Approval of foreign investments is through either automatic route
or Government approval.
Foreign technology induction is encouraged both through FDI
and through foreign technology collaboration agreement. The
agreements can be approved either through the automatic route
under powers delegated to the Reserve Bank of India (RBI) or
otherwise by the Government.
Foreign Trade Policy
In general, all Electronics and IT products are freely importable,
with the exception of some defence related items. All Electronics
and IT products, in general, are freely exportable, with the
exception of a small negative list which includes items such as
high power microwave tubes, high end super computer and data
processing security equipment.

Export Promotion Capital Goods scheme (EPCG) allows import of
capital goods at lower custom duty. The export obligation under
EPOG Scheme can a|so be fu|f||ed by the supp|y of lnformat|on
Technology Agreement items to Domestic Tariff Areas (DTA)
provided the realization is in free foreign exchange.
The import of second hand computers including personal
computers and laptops fall under the restricted import category.

Special Economic Zones (SEZ) Schemes
Spec|a| Econom|c Zone (SEZ} |s a spec|fca||y de||neated duty free
enclave and is deemed to be foreign territory for the purposes
of trade operat|ons and dut|es and tar|ffs. SEZ un|t may |mport/
procure from the DTA without payment of duty all types of goods
and services, including capital goods, whether new or second
hand, required by it for its activities or in connection therewith,
provided they are not prohibited items of imports.
The units are also permitted to import goods required for the
approved activity, including capital goods, free of cost or on
|oan from c||ents. SEZ un|t may, on the bas|s of a frm contract
between the parties, source the capital goods from a domestic/
foreign leasing company.
Export Promotion Schemes
Special schemes are available for setting up Export Oriented Units
for the Electronics/IT Sector. Various incentives and concessions
are available under these schemes. The schemes are:
Export Or|ented n|t (EO}
E|ectron|cs Hardware Techno|ogy Park (EHTP}
Software Techno|ogy Park (STP}
EOU/EHTP/STP units undertaking to export their entire
production of goods and services, except permissible sales in
the Domestic Tariff Area (DTA), may be set up under the EOU,
EHTP or STP Scheme for manufacture of goods, including
repair, re-making, reconditioning, re-engineering and rendering
of services. Trading units, however, are not covered under these
schemes.
100% FDI is permitted through automatic route for the units set
up under these schemes. These units may import and/or procure
from the DTA or bonded warehouses in DTA, without payment
of duty, all types of goods, including capital goods, required for
its activities, provided they are not prohibited items of import in
the ITC (HS). The units shall also be permitted to import goods
including capital goods required for the approved activity, free of
cost or on loan/lease from clients.
SECTION IV. Accessing Indian Market
4.1. Investment Environment
| 59
Software Technology Parks of India (STPI)
STPE scheme has played a pivotal role in catalyzing the growth
of this sector and supporting its rapid proliferation across the
country. The tax holiday has helped attract much needed
investments (MNC and Indian) in the sector and the virtual
mode| has a||owed frms to ava|| benefts w|thout constra|nts
on their choice of location encouraging entrepreneurship and
integrated growth.
The Central Government has also provided many tax and other
incentives to boost investment in the IT outsourcing industry in
lnd|a. Some of the benefts accru|ng to lT frms are:
10 year tax ho||day for compan|es |nvo|ved |n construct|on and/
or maintenance/operation of an infrastructure complex
10 year tax ho||day to frm that generate and/or d|str|bute power
5 year tax ho||day to te|ecom frms prov|d|ng |nternet and
broadband services
10 year tax ho||day to lT frms sett|ng up venture |n not|fed lT
parks and Spec|a| Econom|c Zones (SEZ}
5 year tax ho||day for lT and other frms sett|ng up a project |n
backward districts and states
lT outsourc|ng and other frms a|so get tax |ncent|ves on
exports as tax |s deducted on proft for exporters sett|ng
un|ts on SEZ`s, E|ectron|c Process|ng Zones (EPZ}, Software
Technology Parks (STP)
Attract|ve tax |ncent|ves are ava||ab|e on expend|ture for
research and development including deduction of 150% on
sc|ent|fc research and 10-year tax ho||day for sc|ent|fc and
industrial research R&D companies.


60 |
lt has been seen |n the prev|ous sect|on that lnd|a presents s|gn|fcant opportun|ty |n the lOT doma|n across var|ous |ndustry vert|ca|s.
However, the uniqueness of Indian market arising out of its size, diversity, culture and business practices offers its own sets of challenges.
It is therefore important for organizations evaluating the India opportunity to understand the critical success parameters.
The tab|e be|ow h|gh||ghts the key |ssues and the assoc|ated requ|rements that frms shou|d take |nto cons|derat|on wh||e dec|d|ng on
their India Business Strategy.
4.2. Key Issues & Requirements
ISSUE FACTS/ DESCRIPTION IMPLICATIONS
Building Scale/Managing Growth India is a large country with over 1.2 Billion
people, 16 national languages and 28 states/
7 Union Territories
Managing cultural diversities, logistics
network, overcoming language barriers and
divergent business practices make building
scale in India (for domestic market) an onerous
task. Operational/ Execution Skills are of
paramount importance.
Organizations focusing on tapping domestic
market opportunity would preferably want
local partners to manage these complexities.
This also makes hiring local top management
an important decision parameter.
Focus should be to start operations in one or
few regions and then gradually expand into
other territories
ICT is dominated by large Indian
MNCs
While top 7 companies account for the
majority of revenue by the industry, India
has a vibrant ICT SME sector with over
4000 frms hav|ng |ess than SD 100 M||||on
revenue
Excellent opportunity and eco-system for
Sw|ss SME to fnd the|r expert|se/ n|che
or initiate local operations with acquisition/
partnership
Product vs. Services Capabilities The growth of Indian software and ICT
businesses have been on service model
therefore most innovations are in processes
and not on products
Serious gaps in skills to build products/
brands across the industry. Product focused
Swiss SMEs can utilize these gaps.
Talent Management ICT sector is dominated by high attrition rate
(upto 20%), supernormal salary growth rates
(10-50% per annum) and uncertainties of
people joining (even after acceptance of offer)
The Talent Management requires tactical and
local practices to be followed. Standard HR
practices do not work.
Regulatory The permissions/ licenses etc to start
operating in India are generally streamlined.
Direct and Indirect Taxes, Incentives and legal
compliances are governed by complicated
mesh of different departments in India.
While entry processes have been streamlined,
it might take 15- 30 days to register a
company
Local advice and support is required for day-
to-day operations.
| 61
Government sector opportunity
management
Various sub-sectors like e-governance,
healthcare, education etc are dominated by
government and semi-government sector
where bureaucracy dominates the decision
making process
The red-tapism and process delays are still
s|gn|fcant |n lnd|a and |oca| partner |s a must
to secure these opportunities.
A|so, s|gn|fcant pat|ence and perseverance |s
required in building these businesses (contract
awards may take 12-18 months).
Competitive Advantage The standard competitive advantages of
techno|og|ca| super|or|ty and/ or fnanc|a|
strengths are no guarantee for success in
India
Execution capabilities and price
competitiveness are critical to tap Indian
market.
Long term investment perspective is a pre-
requisite.
Table 18: Key Requirement for Entering India Market

62 |
The objective of this report has been to provide a consolidated
background on the Indian ICT industry and opportunities for
Swiss SMEs in various industry verticals in ICT solutions.
The strength of Indian ICT industry and its global competitiveness
has been the biggest success story of India over the last 2
decades. India has not only become a dominant IT player in
world but also the success has led to stupendous economic
growth and created rich and successful middle class exposed to
international standards.
However, this has been almost entirely focused on services for
exports market. Th|s |s ||ke|y to change s|gn|fcant|y |n future.
Indias deep penetration of mobile phones (aided with the lowest
cost mobile telephony costs), increased need for convenience
for the urban middle class consumer and focus on increasing
competitiveness of Indian manufacturing industry is opening up
the domestic market.
Following are the Growth Drivers of Indian ICT Industry:
Demograph|c sh|fts w||| fue| the growth of new sectors
(healthcare, education, security), markets (BRIC, Japan,
Germany) and service lines (process transformation for
productivity improvement)
Econom|c, soc|a|, env|ronmenta| and techno|ogy trends w|||
create hitherto unseen opportunities (e.g., climate change,
servicing SMEs)
lncreased lT adopt|on |n not on|y |n the |arge/m|d-s|zed
companies, but also in the 35 mn strong small and medium
business (SMB) segments is expected to drive growth in the
future.
Government`s |n|t|at|ve for |nc|us|ve growth & Deve|opment
in India
Swiss SMEs would need to identify the need of their association
with India which we believe could be one of the following:
Tap the domest|c market for |ts products and serv|ces
This would require good understanding of the Indian market,
the concerned sector and cost effective solutions
Make lnd|a as the|r deve|opment/ R&D center
This has been a time tested Indian strength and typically the
process followed is initiation through outsourcing/ developing
an Indian partner and then starting own/ in-house center
Export products/ serv|ces deve|oped |n lnd|a
Swiss SMEs can use their international market understanding
and product/ brand bu||d|ng capab|||t|es wh||e s|gn|fcant|y
reducing development costs by utilizing Indias strengths in
solutions development
Outsource BPO/ lTES Serv|ces/ KPO
Swiss SMEs can increase their competitiveness by ensuring
cost effective solutions for various business operations
A|most a|| sectors of Sw|ss Economy wou|d fnd advantages |n
ut|||z|ng lnd|a`s lOT strength or fnd app||cat|ons for lnd|an market.
lnd|an market offers s|gn|fcant sca|e benefts However, some
of the key sectors that inherent Swiss strengths could provided
added advantages are BFSI (Banking. Financial Services and
Insurance), Automation, E-commerce (E.g. tourism), Security
and Surveillance, and technology dominated manufacturing
industries.
SECTION V. Conclusions
SECTORS KEY OPPORTUNITY
Animation & Gaming Oustom content deve|opment
Mu|t|med|a/ web des|gn
An|mat|on enterta|nment
An|mat|on educat|on
vF
Software for Mob||e Gam|ng
Automation W|re|ess Systems
lndustr|a| Automat|on
Bu||d|ng So|ut|ons
Home Safety & Secur|ty
Offce Automat|on
Scann|ng & Mob|||ty
Robot|cs- Oontro||ers and Software
| 63
Bioinformatics B|o|nformat|cs consu|t|ng-proteom|cs database and ana|ys|s too|s, software systems |n the
functional genomics area etc.
Outsourc|ng b|o|nformat|cs serv|ces to lnd|a
e-Governance (Education &
Others)
D|stance |earn|ng
Bu||d|ng lOT lnfrastructure
n|que ldent|fcat|on Number
Other Government funded lOT Projects
Finance, Banking and Insurance Wea|th Management (e-Portfo||o}
Software for bank|ng secur|ty; secure data transfer; Fraud Detect|on; r|sk management;
lending and mortgage management etc
lOT systems for reta|| bank|ng - core systems and channe|s; e-Bank|ng; customer
management
SMART card and EFTPOS / po|nt of sa|e equ|pment and systems
lnsurance Products- po||cy and c|a|ms serv|c|ng
Bus|ness process management (BPM}
Healthcare Te|emed|c|ne Dev|ces
Med|ca| Equ|pment & Dev|ces
Hosp|ta| lnformat|on System
Hea|th lnsurance
O|oud Based Serv|ces
E-Hea|th
Manufacturing (Automotive/
Electrical etc)
Software app||cat|on (e.g. OAD/OAM} for des|gn|ng automob||es, components and
equipment.
App||cat|ons for MRP, ERP systems, supp|y-cha|n, management
lT Ana|yt|cs for |mproved bus|ness performance (Bl}
Table 19: Sector-wise Key Opportunities in Indian ICT Sector
At the same time, the challenges unique to Indian economy and
cu|ture rema|n s|gn|fcant. The d|ffcu|ty |n sca||ng up bus|nesses,
war for ta|ent, operat|ng |neffc|enc|es and bureaucracy requ|res
patience, perseverance and local cultural understanding to be
successful for foreign enterprises.
Over the years, the process to start a business in India has been
stream||ned s|gn|fcant|y. The |nfrastructura| bott|enecks have
been resolved in key clusters and continue to improve in semi-
urban and rural areas. The economic reforms continue to be on
frm foot|ng and the lOT sector has m|n|ma||st|c restr|ct|ons. The
governments at all levels (Union, State and Municipalities) are
proactive in supporting ICT enabled solutions and organizations.
lnd|a |s a compe|||ng story and prov|des s|gn|fcant growth
opportunities for both international and domestic market. Swiss
SMEs would do well to evaluate and participate in this growth.

64 |
Networked Readiness Index
Edition (No. of economies) Score Rank
2010-2011 (138)4.048
2009-2010 (133)4.143
2008-2009 (134)4.054
2007-2008 (127)4.150
2006-2007 (122)4.144
Environment component 3.9 58
Market environment 4.4 41
Venture capital availability* 3.2 31
Financial market sophistication* 5.2 35
Availability of latest technologies* 5.6 41
State of cluster development* 4.2 29
Burden of government regulation* 3.0 94
Extent & effect of taxation* 3.0 36
Tota| tax rate, % profts 63.3. 119
No. days to start a business 29 94
No. procedures to start a business 12 116
Freedom of the press 6.1 25
Political and regulatory environment 4.3 5.2
Effectiveness of low-making bodies* 4.3 36
Laws relating to ICT* 4.5 39
Judicial independence* 4.8 40
Effc|ency of |ega| system |n sett||ng
disputes*
4.1 46
Effc|ency of |ega| system |n cha||eng|ng
regs*
4.2 37
Property rights* 4.5 60
Intellectual property protection* 3.6 65
Software piracy rate, % software installed 65 58
No. procedures to enforce a contract 46 121
No. days to enforce a contract 1420 133
Internet & telephony competition, 0-6
(best)
6 1
Infrastructure environment 3.1 81
Phone lines/100 pop 3.1 110
Mobile network coverage, % pop.
Covered
83 104
Secure Internet serves/million pop 1.6 104
Intl Internet bandwidth, Mb/s per
10,000 pop
2.2 95
Electricity production, kWh/capita 714.3 104
Tertiary education enrollment rate, % 13.5 101
Oua||ty sc|ent|fc research & tra|n|ng
services*
4.7 30
Availability of scientists & engineers* 5.2 15
Availability research & training services* 4.4 5.1
Accessibility of digital content* 4.5 93
Readiness component 4.8 33
Individual readiness 5.5 21
Quality of math & science education* 4.7 38
Quality of educational system* 4.3 39
Adult literacy rate, % 62.8 120
Residential phone installation (PPP $) 17.9 12
Residential monthly phone subscription
(PPP $)
7.2 44
Fixed phone tariffs (PPP $) 0.06 36
Mobile cellular tariffs (PPS $) 0.06 4
Fixed broadband Internet tariffs (PPP $) 14.9 6
Buyer sophistication* 3.8 4.3
Business readiness 4.5 33
Extent of staff training* 4.1 58
Quality of management schools* 5.1 23
Company spending an R&D* 3.6 37
University- industry collaboration in R&D* 3.7 58
Business phone installation (PPP $) 17.9 5
SECTION VI. Annexure & References
6.1. Network Readiness Index for India
69
| 65
Business monthly phone subscription
(PPP $)
7.2 21
Local supplier quality* 4.6 60
Computer, communication & other
services imports, % services imports
34.6 55
Government readiness 4.5 47
Govt prioritization of ICT* 5.3 35
Govt procurement of advanced tech.* 3.5 75
Importance of ICT to govt vision* 4.6 32
Usage component 3.3 67
Individual usage 2.8 98
Mobile phone subscription/100 pop 43.8 119
Cellular subscriptions w/data, % total n/a n/a
Households w/personal computer, % 4.4 118
Broadband Internet subscribers/100 pop 0.6 100
Internet user/100 pop 5.1 118
Internet access in schools* 3.8 70
Use of virtual social networks 4.8 89
Impact of ICT on access to basic services 4.9 42
Business Usage 3.8 47
Govt success in ICT promotion 5.2 22
lOT use & gov`t effc|ency* 4.7 41
Government Online Service Index, 0-1 (best) 0.37 53
E-Participation Index, 0-1 (best) 0.20 56
Business phone installation (PPP $) 17.9 5
Business monthly phone subscription (PPP $) 7.2 21
Local supplier quality* 4.6 60
Computer, communication & other services
imports, % services imports
34.6 55
Government readiness 4.5 47
Govt prioritization of ICT* 5.3 35
Govt procurement of advanced tech.* 3.5 75
Importance of ICT to govt vision* 4.6 32
Table 20: Network Readiness Index India
69
World Economic Forum Report

66 |
6.2. Country Data
BASIC DATA
70
Land area 3,287,240 sq km (including Indian-administered Kashmir); 57% is agricultural land and 16%
forest area
Population 1.03 Billion (2001 Census), 1.18 Billion (est. April 2010)
Main towns Population in millions, 2001 census
Mumbai (Bombay)
Kolkata (Calcutta)
Delhi
Chennai (Madras)
Bangalore
Hyderabad
16.4
13.2
12.8
6.4
5.7
5.5
Climate Varied; humid subtropical in Ganges basin, semi-arid in north west, tropical humid in north-
east and most of peninsula, all areas receive rain from the south-west monsoon in June-
September; the south is also served by the north-east monsoon in January-March
Languages Hindi is the national language and primary tongue of 30% of the population. There are 16
other offc|a| |anguages: Benga||, Te|ugu, Marath|, Tam||, rdu, Gujarat|, Ma|aya|am, Kannada,
Oriya, Punjabi, Assamese, Kashmiri, Sindhi and Sanskrit, English is widespread in business
and as second language
Religion 2001 Census: Hindu (80.5%); Muslim (13.4%); Christian (2.3%); Sikh (1.9%) Buddhist (0.8%);
Jain (0.4%)
Measures Metric system. Numbers are often written in Lakh (100,000) and Crores (10 Million)
Currency Average exchange rate in 2010: INR 45.65 = USD 1
71
Exchange rate on 30 September 2011: INR 49.05 = USD 1
Fiscal year April 1st- March 31st
Time 5 hours 30 minutes ahead of GMT
70
www.censusindia.gov.in, unstats.un.org, www.wikipedia.org, www.forecast-chart.com, www.x-rates.com
71
forecastchart.com/usd-indian-rupee.html
67 |

2050 1001 1001 2050
lnd|a`s youth bu|ge w||| f|atten |n com|ng years
Ma|e Fema|e
Popu|at|on (m||||ons}
80+
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
80 60 40 20 0 20 40 60 80
6.3. Demographic Trends
According to the 2001 census, Indias population stood at 1.027bn. Even under fairly optimistic assumptions about the pace of future
fertility decline, Indias population is likely reach 1.4bn by 2025.
The number of females per 1,000 males was 933; the difference is due to female infanticide, the neglect of female children and, lately
and the abortion of female foetuses. Population growth averaged 1.9% per year in 1991-2001, down from an average of 2.1% in 1981-
91 and 2.3% in the 1960s.
KEY GROWTH FACTORS
Following are the key factors that have led to the transformation of Indian economy and are helping it to become a destination for
all the global majors:
R|s|ng consumer spend|ng and |arge domest|c market
Growth of Serv|ces
lnd|an manufactur|ng estab||sh|ng |tse|f |n the g|oba| arena
Pervas|ve commun|cat|on: sate|||te and cab|e Tv, mob||e te|ephony, fber opt|c broadband
lnfrastructure growth - H|ghway, Ports and rban Transport
Democrat|c and mature po||t|ca| set-up w|th deve|opment and pro-|nvestor reforms as |ts core agenda
|arge poo| of young, Eng||sh-speak|ng and sk|||ed workforce
The critical bottlenecks however are inadequate supply of infrastructure (especially power),
There is a large and growing middle class of more than 50 mn Indians with disposable income ranging from 200,000 to 1,000,000
Rupees per year (USD 4,444 to 22,222).
Indias Middle Class Indias Demographic Pyramid
Over 40% of the popu|at|on w||| be cons|dered m|dd|e c|ass by 2025
Annua| househo|d
lncome (Rs. thousands}*
G|oba|s (>1,000}
Str|vers (500-1,000}
Seekers (200-500}
M
|
d
d
|
e
O
|
a
s
s
Asp|rers (90-200}
Depr|ved (<90}
100%
1985 1995 2006E 2015F 2025F
S
h
a
r
e

o
f

p
o
p
u
|
a
t
|
o
n
* constant year 2000 rupees
Source: McKinsey Global Institute Source: US Census Bureau,
International Database

| 68
The associated risks are categorized into four sections as:
1. Economic Risks
2. Energy Risks
3. National Risks
Economic Risks
Following are the important trends which were observed:
Econom|c uncerta|nty:
The integration of India with the global economy has been steady
the economy has shown correlation with the global sentiment.
Inat|on:
The |nfat|on has been h|gh at 8-11% |n the |ast 2 years.
Currency:
The lnd|an Rupee cont|nues to be vo|at||e. S|gn|fcant fuctuat|ons
ranging from INR 39/USD to INR 50/USD have created
uncertainties for import-export oriented businesses.
Land and Infrastructure:
The rapid economic growth of the last few years has put heavy
stress on Indias infrastructural facilities. The projections of
further expansion in key areas will have a further impact on the
strained lines of transportation. The key problems include power
demand shortfa||, port traffc capac|ty m|smatch and poor road
conditions. Infrastructure projects are necessary to improve
rural-urban communications and facilitate inter and intra-state
fows of commod|t|es and serv|ces.
Energy Risks
Inefc|ent Power:
More than 40% of Indias population (over 400 mn people), live in
the rural areas and they lack the access to electricity.
Energy effc|ency |s a key component of the nat|ona| deve|opment
strategy.
Import dependency:
The production of crude oil has been stagnant which has led to
the dependency on crude oil imports with India importing more
than 70% of its oil. Increase in consumption pattern and rise in
o|| pr|ces wou|d add more pressure to the current account defc|t.
National Risks
Po||t|ca| stab|||ty:
India is the largest democracy in the world and has multiple
party systems with predominance of regional political parties.
The parties differ in their political ideology which in turn depends
upon the region to which the party belongs to. In past several
decades no single party has been able to gain the majority of
seats in general elections and therefore coalition governments
have ruled the nation. However, excellent political consensus has
emerged within the country with respect to economic reforms
and progressive business regulation over last two decades
providing the stability required for growth.
Reg|ona| sources of |nstab|||ty:
The situation in the state of Jammu Kashmir and relationship of
India with the neighbour Pakistan is one of the major sources of
instability in the region. The continuous instability in Afghanistan
and along its border with Pakistan remains an additional source
of |nstab|||ty |n the reg|on. Th|s has |ed to mu|t|p|e conf|cts and
increased defence budgets in South Asia.
Increased number of terror|st |nc|dents:
In the recent time there have been several fatal attacks carried
out in several cities including Delhi, Mumbai and Bangalore. Over
4,800 people were killed in terrorist attacks between 2004 and
mid-2008.
6.4. Key Macro-Level Risks
India Advantage:
India is expected to continue in its superior growth trajectory
over the next decade. The growth of domestic demand backed
by growing Middle Class along with signifcant improvements
in infrastructure and business environment since the economic
liberalization has made India a preferred market for Western
companies. On the downside however, there is volatile currency,
rising infation, ineffcient power distribution, vulnerability to
global crude oil price risks and a threat from terrorism
69 |
6.5. Major Challenges & Concerns for ICT in Flare:
CHALLENGES DESCRIPTION
Portability Reduce effort required to support applications across heterogeneous platforms,
programming languages & variety of compilers
Flexibility Support a grow|ng range of mu|t|med|a data-types, traffc patterns, and end-to-end
quality of service requirements
Extensibility Support successions of quick updates and additions to take advantage of new
requirements and emerging markets
Pred|ctab|||ty & Effc|ency Provide low latency to delay-sensitive real-time applications & high performance to
bandwidth intensive ones
Reliability Ensure that applications are robust, fault tolerant, and highly available
Quality Ensure performance
Speed Enable quick development and delivery of business critical applications
Scalability Ensure that the system is scalable at state and national level of initiatives
Security Ensure safe fnanc|a| transact|ons
Financial Viability lf the techno|ogy makes the bus|ness fnanc|a||y v|ab|e
Organizational Capability If the organization have adequate skills to handle the technology spread
Simplicity and Usability The applications must be user friendly with little or no learning curve to the customer. The
customer must also be able to personalize the application to suit his or her convenience
Universality Payment service must provide for transactions between one customer to another customer
(C2C), or from a business to a customer (B2C) or between businesses (B2B). The coverage
should include domestic, regional and global environments. Payments must be possible in
terms of both low value micro-payments and high value macro-payments
Interoperability Development should be based on standards and open technologies that allow one
implemented system to interact with other systems
Security, Privacy and Trust A customer must be able to trust a service provider that his or her credit or debit card
information may not be misused. Secondly, when these transactions become recorded
customer privacy should not be lost in the sense that the credit histories and spending
patterns of the customer should not be openly available for public scrutiny. Digital payments
have to be as anonymous as cash transactions. Third, the system should be foolproof,
resistant to attacks from hackers and terrorists. This may be provided using public key
infrastructure security, biometrics and passwords integrated into the mobile payment solution
architectures
Cost The techno|ogy enab|ed channe|s for access|ng fnanc|a| serv|ces |nc|ud|ng payments and
remittances should not be costlier than the existing payment mechanisms to the extent
poss|b|e. A techno|ogy enab|ed fnanc|a| serv|ce a|ternat|ve shou|d compete w|th other modes
of payment in terms of cost and convenience
Speed The speed at wh|ch fnanc|a| transact|ons are executed must be acceptab|e to customers and
merchants
Table 21: Challenges for ICT solutions for Financial Inclusion

| 70
6.6. E-Governance Projects Initiated by
Government of India
SR. NO. AREA OF MMP TYPE OF MMP URL
1 Banking Central MMP http://mit.gov.in/content/banking
2 Central Excise & Customs Central MMP http://mit.gov.in/content/central-excise-customs
3. Income Tax (IT) Central MMP http://mit.gov.in/content/income-tax-it
4. Insurance Central MMP http://mit.gov.in/content/insurance
5 MCA21 Central MMP http://mit.gov.in/content/mca21
6 National Citizen Database Central MMP http://mit.gov.in/content/national-citizen-database
7 Passport Central MMP http://mit.gov.in/content/passport-immigration-visa
8 Immigration, Visa and Foreigners
Registration& Tracking
Central MMP http://mit.gov.in/content/ivfrt
9 Pension Central MMP http://mit.gov.in/content/pension
10 e-Offce Central MMP http://m|t.gov.|n/content/e-offce
12 Agriculture State MMP http://mit.gov.in/content/agriculture
13 Commercial Taxes State MMP http://mit.gov.in/content/commercial-taxes
14 eD|str|ct State MMP http://mit.gov.in/content/e-district
15 Employment Exchange State MMP http://mit.gov.in/content/employment-exchange
16 Land Records State MMP http://mit.gov.in/content/land-records
17 Municipalities State MMP http://mit.gov.in/content/municipalities
18 Gram Panchayats State MMP http://mit.gov.in/content/panchayats
19 Police State MMP http://mit.gov.in/content/police
20 Road Transport State MMP http://mit.gov.in/content/road-transport
21 Treasuries State MMP http://mit.gov.in/content/treasuries
22 CSC Integrated MMP http://mit.gov.in/content/common-services-centers
23 e-Biz Integrated MMP http://mit.gov.in/content/e-biz
24 e-Courts Integrated MMP http://mit.gov.in/content/e-courts
25 e-Procurement Integrated MMP http://mit.gov.in/content/electronic-data-interchange-edi-
trade-etrade
26 EDI For eTrade Integrated MMP http://mit.gov.in/content/nsdg
27 National e-governance Service
Delivery Gateway
Integrated MMP http://mit.gov.in/content/india-portal
Table 22: List of MMPs (e-governance projects)
71 |
6.7. Fairs & Events
SOME IMPORTANT EVENTS FOR 2012
NAME LOCATION WEBSITE DATE
ET-Asia ITEX Mumbai www.asiaitex.com/mumbai.html 07-Oct-11
Cloud Computing World Forum Mumbai www.cloudcomputinglive.com/india 12-Oct-11
International Conference on
Computational Intelligence and
Information Technology CIIT 2011
Pune ciit.engineersnetwork.org/2011 07-Nov-11
International Conference on Data
Management ICDM2011
Ghaziabad www.imt.edu/icdm2011/index.html 17-Nov-11
International Trade fair and Seminar for
Banking Technology, Equipment and
Services
Mumbai www.ibexindia.com/home.html 1-Dec-11
Indian Telecom New Delhi www.indiatelecom.org 7-Dec-11
IBEX India 2011 New Delhi www.ifsecindia.com/exhibit/globalpartners.asp 08-Dec-11
World Congress on Information and
Communication Technologies (WICT
2011)
Mumbai www.mirlabs.org/wict11/index.php-
c=main&a=index.htm
11-Dec-11
E-commerce & Payments World India
2011
Mumbai www.terrapinn.com/conference/ecommerce-
payments-india/
05-Jan-12
Frontier Global Issues and Challenges
in the
New Millennium on Emerging Economy,
Accounting,
Finance, Information & Communication
Technology,
Business & Management
Jaipur www.rdaindia.net/download/RDA_Conference.
pdf
05-Jan-12
National Conference on Business
Analytics and Business Intelligence
Hyderabad www.ncbia.ipeindia.org 6-Jan-12
2012 4th International Conference on
Computer and Automation Engineering
ICCAE 2012
Mumbai www.iccae.org 15-Jan-12
Indian Digital Summit & Indian Digital
Awards
New Delhi 18-Jan-12
International Conference on Cloud
Computing
Bangalore www.interscience.ac.in/ICCC/index.html 29-Jan-12
Internet Retail Expo New Delhi www.biztradeshows.com/internet-retail-expo 02-Feb-12
ET-Asia ITEX New Delhi www.biztradeshows.com/etasia-itex-newdelhi 12-Feb-12
IT INDIA FAIR 2012 New Delhi www.eventseye.com/fairs/f-it-india-
fair-11451-1.html
12-Mar-12
Convergence India New Delhi www.convergenceindia.org 21-Mar-12

| 72
6.8. Regulatory & Trade Bodies
TYPE OF ASSOCIATION NAME WEBSITE
IT/ITES
Regulatory Department of Telecommunications(under Ministry
of IT and Communications)
www.mit.gov.in
Trade Association Electronics and Computer Software Export
Promotion Council (ESC) (External website that
opens in a new window)
www.escindia.in
Trade Association Software Technology Park of India www.stpi.in/index.html
Trade Association Nasscom www.nasscom.in
Trade Association CII (Confederation of Indian Industry) www.ciionline.org
Trade Association Manufacture Association of Information
Technology
www.mait.com
Trade Association FICCI (Federation of Indian Chamber of
Commerce & Industry)
www.fcc|.com
Trade Association All India Association of Computer Centres & IT
Professionals
aiita.org
Trade Association Trade Association of Information Technology (TAIT) www.ta|t-mumba|.com/prof|e.htm|
Trade Association Indian Chamber of Commerce www.indianchamber.org/default.aspx
Trade Association The Associated Chambers of Commerce and
Industry in India
www.assocham.org/sectors/index.php
Telecom
Regulatory Telecom Regulatory Authority of India (TRAI) www.trai.gov.in/Default.asp
Trade Association CMAI Association of India www.cmai.asia
Trade Association COAI (Cellular Operators Association in India) www.coai.com
Trade Association Telecom Equipment Manufacturers Association of
India
www.tematelecom.net
Trade Association India-tech foundation www.india-tech.com
Trade Association Pac|fc Te|ecommun|cat|ons Oounc|| lnd|a
Foundation
www.ptcif.org.in
Trade Association IAMAI (Internet and Mobile Association of India) www.iamai.in/introabout.aspx
Trade Association Assoc|at|on of n|fed Te|ecom Serv|ce prov|ders
of India (AUSPI)
www.auspi.in
INTERNET AND BROADBAND
Regulatory Telecom Regulatory Authority of India (TRAI) www.trai.gov.in/Default.asp
Trade Association Internet Service Providers of India, www.ispai.in
Trade Association IAMAI (Internet and Mobile Association of India) www.iamai.in/default.aspx
HEALTHCARE
Regulatory Medical Council of India www.mciindia.org
73 |
Regulatory Central Drugs Standard Control Organization www.cdsco.nic.in
Regulatory Ministry of health and family welfare www.mohfw.nic.in
Regulatory Voluntary Healthcare Association of India www.vhai.org
Trade Association Indian Association of Medical Informatics www.iami.org.in
GAMING AND ANIMATION
Trade Association iGITA (Indian Games Industry and Trade
Association)
Trade Association Advertising Agencies Association of India (AAAI) www.aaaindia.org
Not for Proft Organ|zat|on Indian Documentary Producers Association(IDPA) www.idpaindia.org
Education
Regulatory University Grants Commission www.ugc.ac.in
Regulatory National Council for Educational Research and
Training
www.ncert.nic.in
Trade Association All India Association for Educational Research www.aiaer.net
Trade Association Indian Adult Education Association www.iaea-india.org
MANUFACTURING
Trade Association CII (Confederation of Indian Industry) www.ciionline.org
Trade Association IMTMA (Indian Machine Tools Manufacturers
Association)
www.imtma.in
Trade Association Indian Paper Manufacturers Association (IPMA) www.ipma.co.in
Trade Association Society of Indian Automobiles Manufacturer
(SIAM)
www.siamindia.com
Trade Association Cements Manufacturers Association (CMA) www.cmaindia.org
Trade Associations Indian Electrical & Electronics Manufacturers
Association
www.ieema.org
Trade Associations All India Association of Industries www.aiaiindia.com
BANKING AND INSURANCE
Regulatory Insurance Regulatory and Development Authority
(IRDA)
www.irda.gov.in/Defaulthome.aspx?page=H1
Regulatory Securities and Exchange Board of India (SEBI) www.sebi.gov.in/sebiweb
Regulatory Reserve Bank of India (RBI) www.rbi.org.in
Regulatory Forward Market Commission www.fmc.gov.in/index.htm
Trade Associations Indian Banks organisation www.iba.org.in
Trade Associations Insurance Bankers Association of India www.ibai.org
Trade Associations General Insurance Council gicouncil.in/default.asp
Fairs/Symposium International Banking Technology Conference,
Expo & Award
www.iba-banktech.com/index.htm
SECURITY
Regulatory Department of IT and Communications http://www.mit.gov.in
Regulatory Indian Computer Emergency Response Team www.cert-in.org.in

| 74
Trade Associations Data Security Council of India www.dsci.in/taxonomypage/1
E-COMMERCE
Trade Association IAMAI (Internet and Mobile Association of India) www.iamai.in/introabout.aspx
AGRICULTURE
Government/Promotion Body National Agricultural Innovation Project (NAIP) www.ekrishinaip.in/index.php/home
Government/Promotion Body e-agriculture www.e-agriculture.org/e-agriculture
BIOINFORMATICS
Education/promotion Body All India Biotech Association
Education/promotion Body Bioinformatics Association of India (BAI) indiabioinfo.webs.com
Education/promotion Body Bioinformatics Institute of India (BII) www.bii.in/index.html
Education/promotion Body Institute of Bioinformatics www.ibioinformatics.org
75 |
6.9. Abbreviations
ABBREVIATION FULL FORM
2D Two Dimensions
3D Three Dimensions
3G Third Generation
AAAI Advertising Agencies Association of India
AMI Advanced Metering Infrastructure
ARPU Average Revenue per User
ATM Automated Teller Machine
AUSPI Assoc|at|on of n|fed Te|ecom Serv|ce prov|ders of lnd|a
B2B Business to Business
B2C Business to Consumer
BAI Bioinformatics Association of India
BC Business correspondents
BFSI Banking, Financial Services and Insurance
BI Business intelligence
BII Bioinformatics Institute of India
bn Billion
BOOT Build Own Operate Transfer
BPM Business Process Management
BPO Business Process Outsourcing
BRIC Brazil, Russia, India, China
BWA Broadband Wireless Access
C2C Consumer to Consumer
CAD Computer Aided Design
CAGR Compound Annual Growth Rate
CAM Computer Aided Manufacturing
CAT Customer-Activated Terminal
CBS Core Banking Solutions
C-DAC Centre for Development of Advanced Computing
CDMA Code Division Multiple Access
CD-ROMs Compaq Disc Read only memory
CEERI Central Electronics Engineering Research Institute (CEERI), Pilani
CERT-In Indian Computer Emergency Response Team
CII Confederation of Indian Industry
CIIT Computational Intelligence and Information Technology
C-MET Center for Materials for Electronics Technology

| 76
CMA Cement Manufacturers Association
CMM Capability Maturity Model
COAI Cellular Operators Association in India
CPOE Computerised Physician Order Entry
CPU Central Processor Unit
CRAMS Contract Research and Manufacturing Services
CRM Customer Relationship Management
CRO Contract research organizations
CSC Common Services Centres
CSIR labs Oounc|| of Sc|ent|fc and lndustr|a| Research
DECT Digital Enhanced Cordless Telecommunications
DLP Data Loss Prevention
DMSS Distribution Marketing Sales and Services
DSCI Data Security Council of India
DSS Decision Support System
DTA Domestic Tariff Areas
DVD Digital Versatile Disk
E- Governance Electronic Governance
EASIEST Electronic Accounting System in Excise and Service Tax
E-commerce Electronic Commerce
ECS Electronic Clearing Service
EDI Electronic Data Interchange
EFTPOS Electronic Fund Transfer at Point of Sale
EHR Electronic Health Record
EHTP Electronics Hardware Technology Park
EMR Electronic Medical Record
EMS Electronic Management System
EOU Export Oriented Unit
EPCG Export Promotion Capital Goods scheme
EPZ E|ectron|c Process|ng Zones
ERNET Education and Research Network
ERP Enterprise resource planning
ESC Electronics and Computer Software Export Promotion Council
ET Economic Times
EU European Union
FDI Foreign Direct Investment
FI Financial Inclusion
FICCI Federation of Indian Chamber of Commerce & Industry
77 |
FIT Funds in transit
FMT Financial Management Trainings
FY Financial Year
GDP Gross Domestic Product
GPRS General Packet Radio Service
GRC Governance, Risk and Compliance
GSM Global System for Mobile Communication
HFC Housing Finance Companies
HH Household
HIE Health Information Exchange
HIPAA Health Insurance Portability and Accountability Act
HIPS Host-based Intrusion Prevention System
HIS Healthcare Information System
HR Human Relations
HRM Human Resources Management
IaaS Infrastructure as a Service
IAMAI Internet and Mobile Association of India
ICCAE International Conference on Computer and Automation Engineering
ICDM International Conference on Data Management
ICT Information & Communication Technology
IDS Intrusion Detection System
IES Indian Education Sector
iGITA Indian Games Industry and Trade Association
IIITs Indian Institute of Information Technology
IISc Indian Institute of Science
IITs Indian Institute of Technology
ILD International Long Distance
IMPS Interbank Mobile Payments Service
IMTMA Indian Machine Tools Manufacturers Association
INR Indian National Rupee
IP Intellectual Property
IPMA Indian Papers Manufacturers India
IPR Intellectual Property Rights
IPS Intrusion Protection System
IPsec Internet Protocol Security
IP-VPN IP-based virtual private network
IRDA Insurance Regulatory and Development Authority
ISO Indian Standards Organisation

| 78
IT Information Technology
ITC (HS) lnd|an Trade O|ass|fcat|on (Harmon|sed System}
ITeS Information Technology enabled Services
ITIRs Information Technology Investment Regions
IVRS Interactive Voice Response System
K 12 Primary and Secondary School
KPO Knowledge Process Outsourcing
LED Light Emitting Diode
LIMS Laboratory Information Management System
MCA21 Ministry of Corporate Affairs
MFI M|crofnance lnst|tut|ons
MHRD Ministry of Human Resource Development
MMOG Massive Multiplayer Online Games
MMP Mission Mode Projects
mn Million
MNC Multinational National Corporation
MNE Multinational Enterprise
MPLS Multi-Protocol Label Switching
MRP Material Requirement Planning
MSME Micro, Small and Medium Enterprise
MSS Managed Security Services
NAIP National Agricultural Innovation Project
NBFC Non Banking Financial Companies
NEFT National Electronic Funds Transfer
NeGP National e-Governance Plan
NFE Non-Formal Education
NG-RTGS Next Generation Real Time Gross Settlement
NHIN National Health Information Network
NIPS Network-based Intrusion Prevention System
NLD National Long Distance
NRI Network Readiness Index
ODL Open & Distance Learning
OECD Organisation for Economic Cooperation and Development
OLTAS Online tax accounting system
PaaS Platform as a Service
PACS Picture Archiving and Communication System
PC Personal Computers
PCO Pub||c Oa|| Offces
79 |
POS Point of Sale
POT Point of Transaction Terminal
PPP Public Private Partnership
PSTN Public Switched Network Telephone
R&D Research and Development
RACS Reconciliation Accounting and Cash Settlement
RBI Reserve Bank of India
REC Regional Engineering Colleges
RFID Rad|o Frequency ldent|fcat|on
RRB Regional Rural Banks
RTGS Real Time Gross Settlement
SaaS Software as a Service
SEBI Securities and Exchange Board of India
SEZ Spec|a| Econom|c Zones
SHG Self Help Groups
SIAM Society of Indian Automobile Manufacturers
SMB Small and Medium Businesses
SME Small & Medium Enterprises
SMS Short Messaging Service
SSA Sarva Shiksha Abhiyan
SSL Secure Socket Layer
STP Software Technology Park
Telecom Telecommunication
TAIT Trade Association of Information Technology
TPA Third Party Auditor
TRAI Telecom Regulatory Authority of India
UIDAI n|que ldent|fcat|on Author|ty of lnd|a
UK United Kingdom
USA United States of America
USD United States Dollar
UTM n|fed Threat Management
VAS Value Added Services
VFX Visual Effects
VoIP Voice over Internet Protocol
VPT Village Public Telephones
WICT World Congress on Information and Communication Technologies
WiMAX Worldwide Interoperability of Microwave Access
Table 23: Abbreviations

| 80
Table 1: Structure of Indian IT-BPO Industry 7
Table 2: Key Trends for Growth of IT-BPO Industry in India 8
Table 3: Electronic Hardware Industry CAGR 9
Table 4: Domestic ICT Clusters 13
Tab|e 5: Spec|fc trends po|nt|ng to growth of lOT 14
Table 6: Top 10 Business and Technology Trends for ICT in India 16
Table 7: Growth Path for mobile enterprise applications, 2011 20
Table 8: Key Focus Areas for ICT 22
Table 9: Healthcare Sector Status 23
Table 10: Indian Education Sector Structure34 29
Table 11: Drivers, Risk and Key Players in ICT in non-formal Education Sector 30
Table 12: ICT in Government Schools Opportunity 31
Table 13: Vocational Training Market Segment 31
Table 14: Value Added Services (VAS) Market Share 38
Table 15: Indian Security Market 46
Table 16: Bioinformatics Vendor capabilities by category in India 54
Table 17: Opportunities foe Swiss SMEs 57
Table 18: Key Requirement for Entering India Market 61
Table 19: Sector-wise Key Opportunities in Indian ICT Sector 63
Table 20: Network Readiness Index India 65
Table 21: Challenges for ICT solutions for Financial Inclusion 69
Table 22: List of MMPs (e-governance projects) 70
Table 23: Abbreviations 75

7. List of Tables
| 81
Figure 1: Indian IT sector Revenues 5
Figure 2: Indian IT Sector Export Revenue 6
Figure 3: Indian IT Market Domestic Market Revenue 6
Figure 4: Composition of Industry Verticals in IT Exports 7
Figure 5: Major IT Export Destination 7
Figure 6: Demand Supply Gap and Projected Growth of Electronics Industry 9
Figure 7: Gross Revenue Indian Telecom Sector 10
Figure 8: Applications that are being ported to mobility platforms 20
Figure 9: Healthcare Market Breakup 23
Figure 10: ICT for Education Ecosystem 30
Figure 11: Teledensity in Wireless and Landline 36
Figure 12: Telecom Urban Rural Divide 36
Figure 13: Wireless Subscribers Forecast and GSM CDMA Divide 37
Figure 14: Internet and Broadband Subscribers 37
Figure 15: Broadband subscribers Forecast 38
Figure 16: VAS Market Size 38
Figure 17: Payment Flow as times of GDP 42
Figure 18: Security Product Market in FY10 46
Figure 19: Indian Security Services Market: Share of Companies 46
Figure 20: Global Spam Scenario 47
Figure 21: E-commerce Market in India 49
Figure 22: E-market Sectoral Share 49
Figure 23: Public Sector Spending on IT 51
8. List of Figures

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