Presented by:Jayati Bhasin (46)

The Indian IT industry is growing steadily despite the global meltdown in the year 2009. When the whole of the world witnessed the negative growth, Indian IT industry still managed to register a growth of 5.5%. Indian IT/ ITes sector is growing substantially with its expansion into varied verticals well differentiated service offerings increasing geographic penetration

Prior to 1980

1980- 1990 1990-2000

post 2000

The Indian IT industry comprises of well established billion dollar firms as well as start ups or the emerging players. The industry can be described as fragmented yet concentrated..

The industry can be categorized into: Tier I Players Tier II Players Offshore Global Services Provider Pure Play BPO Providers Captive BPO Units Emerging Players

Tier I Players No. of Players: 5- 7 Share in Exports: 45% of IT services, 4- 5 % or BPO Performance: Revenues greater than US $ 1 billion

Offshore Global Services Provider No. of Players: 30- 40 Share in Exports: 10- 15 % of IT services, 10- 15 % of BPO Performance: Revenues US $ 10- 500 billion

Tier II Players No. of Players: 10- 12 Share in Exports: 25% of IT ser vices, 4- 5% of BPO Performance: Revenues greater than US $ 100 billion

Pure Play BPO Providers No. of Players: 45- 50 Share in Exports: 20% of BPO Performance: Revenues US $ 10- 200 billion (excluding top provider with US $ 500 million)

Emerging Players No. of Players: >3000 Share in Exports: 10- 15% of IT services & 5% of BPO Performance: Revenues less than US $ 100 billion (IT) & Revenues less than 10 billion (BPO)

Captive BPO Units No. of Players: 150 Share in Exports: 50% of BO Performance: Revenues US $ 25- 150 billion (top 10 units)

The Indian IT industry has been growing at a rapid pace by offering a wide range of products and services.

The growth of the industry can be studied by observing the growth in all the segments of the industry. There has been a growth in the exports as well as domestic sales.

Top 10 IT companies in India commands over 95% market share of Indian IT Services Industry(Software excluding hardware) in 2011. Top 5 IT companies commands over 80% market share of Indian software industry as of 2011. TCS enjoys 25% while Infosys has 18% market share.

1. High Attrition Rate: Staff shortage can prove to be a major bottleneck to the growth of the industry. According to McKinsey & Co., only 25 percent of the technical graduates are competent enough to work in the offshore IT industry in India. 2. Competition from other emerging nations: Chinese IT hubs like Beijing and Shanghai are set to overtake Indian hubs by the year 2011, according to a report by IDC. 3. There is a need for improvement in the urban infrastructure. According to McKinsey, further growth of the industry has to come from small districts, outside the Tier 1 and Tier 2 cities. 4. Lack of fluency in languages other than English, e.g. French, Spanish, Italian etc. is proving to be a weakness of the Indian IT industry.

5. End of Tax Benefits at STPIs: There is a dissimilarity in the tax regimes at STPIs. This would lead to conversion of these STPIs into SEZ units. 6. Overdependence on US Economy: Almost 70% of the IT industry revenues comes from USA. Therefore, any downscale in the US market, adversely impacts the Indian market too. E.g. recent downsizing and job cuts due to recession in the US market. 7. Rupee Appreciation: As most of the earnings are in foreign currencies, therefore Rupee appreciation becomes an area of concern for the industry.

8. Limited Domestic Market: The domestic market is still in the nascent stage in India. This makes the whole industry vulnerable to export market only.