India’s IT Sector Gains Lift from Outsourcing
India’s information technology sector, which rose to prominence by targeting overseas markets, has found an unexpected way to offset the global economic crisis: tapping the country’s growing domestic appetite for outsourcing.
The country’s top computer services groups, such as Wipro Technologies, are hauling in larger and more complex contracts from India’s booming mobile telephony industry and from an initiative in the central and state governments to upgrade systems.
“A 40-50 per cent compound annual growth rate over the last three years – that is the sort of growth we have been driving in India,” said Suresh Vaswani, joint chief executive of Wipro, the country’s third largest IT outsourcing group.
India’s outsourcing industry has risen to become the foundation of the country’s modern economy through aggressive targeting of export earnings, which reached an estimated $47.3bn in the year ended March, up 15.8 per cent against a year earlier.
But the growth of India’s modern economy is bringing this cycle full circle, with the domestic information technology outsourcing market beginning to provide more opportunities for Wipro and peers such as Tata Consultancy Services.
The National Association of Software Services Companies, India’s IT industry body, calculates that annual sales in the domestic outsourcing sector have grown to $24.3bn from $13.2bn just three years ago.
