indian it industry vast growth potential
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Indian IT Industry Vast Growth Potential. IT Industry. India - An Overview Market and Growth Potential Players Opportunities Why India? Contact in India. India - An Introduction. Population States/UTs Geographical Area Languages recognised Business language Per Capita Income** - PowerPoint PPT PresentationTRANSCRIPT
March 2005
Indian IT IndustryVast Growth Potential
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
India - An Introduction
Population
States/UTs
Geographical Area
Languages recognised
Business language
Per Capita Income**
GDP**
Over 1 bn
35
3.3 mn sq kms
22
English
US$ 534
US$ 650 bn**(at factor cost & at current prices)
1USD=43.54 INR (as on July 4, 2005)
Source:CSO Statistics
March 2005
India - Fast pace Growth
Largest democracy
4th largest economy by PPP index
6th largest energy consumer
ForEx reserves skyrocket from USD 42 bn (2001) to
USD 123 bn (2004)
GDP growth to continue between 6-8%
3rd largest economy by 2050: Goldman Sachs
Leading in IT & BPO
Oil & Gas and Biotechnology sunrise industries
March 2005
India - Leading the world
Hero Honda - largest manufacturer of motorcycles
Moser Baer - 3rd largest optical media
manufacturer in world
Pharmaceutical Industry - 4th largest in world
Walmart, GAP, Hilfiger sources more than
USD 1bn worth apparel from India
100 Fortune 500 have set R&D facilities in India
including GE, Delphi, Eli Lilly, HP, Heinz and Daimler
Chrysler
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Huge and Growing IT Market
Size (2002-03) US$ 24 billionGrowth rate 28%
Share of IT and BPO 1.4% of GDP2008 projection 7%
Exports projected (2003-04) US$ 12 billionto grow at 26-28%
CAGR (since 1999) 46%
Employment Over 650,000(Second largest employer in IT services sector)
March 2005
Future Growth Potential
By 2008
17 million people available
USD 35 billion domestic software market
March 2005
Growth in Domestic Outsourcing
257560
9001,340
2,300
3,800
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04
(USD Million)
Alignment to domain knowledge needs
March 2005
Moving up the Value Chain
1960 Client / Server InternetMainframe
Facilities managementUnix-based coding Maintenance
Migration & Re-engineering
Package Implementation
Application development
Web Enabling legacy
Consulting
Maintenance
Package ImplementationE-business applications
Embedded software
Network Management
Network Security
Aligned to technology needs
March 2005
Growth of the Offshore Model
0
20
40
60
80
100
1991-92 2001-02 2002-03
Onsite Services Offshore Development
% of software export
Alignment to business needs
March 2005
Potential Domestic Hardware Market 2010
US$ 44 billion
By Value Addition
37.4
21.8
8.3
6.9
10.2
6.6
5.4
6.9
-
10
20
30
40
50
Finished Product
Product Manufactured from sub-assembly
Sub-assembly manufacture from components
US
$ B
illi
on
Locally Manufactured Imports Value Addition
By Product Segment
20.1
13.4
6.7
4.0
IT Hardware.Telecom
Consumer ElectronicsOthers
Total Market: USD 44 Billion
March 2005
Potential Hardware Exports
Exports by Value Chain
11
2
7
5
OEM + ODM
Products
Design Services
Components
Exports manufacture by Value addition
Local Imports Value Addition
Products & Assemblies
13.0
7.1
2.9
4.5
3.2
1.4
1.1
0
2
4
6
8
10
12
14
US
$ B
illi
on
Total Exports: USD 25 BillionProducts & Assembly manufacture from sub-assembly
Sub- assembly manufacture from components
USD 25 billion
March 2005
Focus Areas
Utilities
Transportation
Healthcare
Financial Services
Telecom Equipment
Manufacturing Industries
Targeting new verticals
Beyond traditional sectors
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Indian Players
TCS Wold leading IT consulting services andbusiness process outsourcing company
Infosys Provides consulting and IT services to clients globally as partners
Wipro Serves over 300 global leaders and is world’s first PCMM, CMMi and CMM Level 5 company
March 2005
MNC Presence
MNCs contribution
to export revenues
from IT services
23.5%
March 2005
MNC presence in India
Services
IBM, USA
Kelton Graphics Inc., USA
Intergraph Corp., USA
Capricorn Systems Inc., USA
Microsoft, USAProducts
Oracle Inc., USA
SUN Micro System Inc, USA
IBM, USA
NOVELL, USA
Dun & BradStreet., USA
Deneb Robotics., USA
Manhattan Associates., USA
March 2005
MNC presence in India
IT InfrastructureHewlett Packard, USA
CISCO, USA
SUN Micro System Inc, USA
IBM, USA
Silicon Graphics Inc., USA
Siemens Nixdorf., Germany
Hughes Network Systems., USA
Fujitsu, Japan
Bull, France
Alcatel, France
Embedded systems
Cadence Design Systems Inc., USA Texas Instruments Inc., USA
Motorola Inc., USA
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Invest in India
Skills
Quality
Domain
Policy
Infrastruct
ure
Risk
March 2005
Invest in India
1,858
1,1051,054
965
548393
263 17236 22 17 8 7
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1
Japan
India
South Korea
Singapore
Australia
China
Hong Kong
Taiwan
Malaysia
Sri Lanka
New Zealand
Philippines
Thailand
Source: NASSCOM
India attracts second highest privateequity investment in Asia
March 2005
Invest in India
Package Software Implementation
System Integration
R& D Engineering
Network Management
Advancing on the value chain
March 2005
Partner with India
Venture funding activities to increase 9 folds by 2007-08
2001 - 02 USD 1,100 million
2007 - 08 USD 10,000 million
Venture funding activities
March 2005
Export from India
20%
80%
HardwareSupport andInstallationPackaged S/Wsupport andImplementation
Product Services
March 2005
7%3%
90%
IS Consulting
System Integration
CustomerApplications
Professional Services
Export from India
March 2005
Export from India
46% 54%
Applicationmanagement
Network anddesktopoutsourcing
Outsourcing Services
March 2005
IT Outsourcing - Expanding Opportunities
Software development outsourcing
Product development outsourcing
March 2005
Destination India
73%
4% 4% 4% 2% 2% 2%
20%
0%
25%
50%
75%
Offshoring of outsourcing
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
The India Advantage
Quality manpower
Pro active policy framework
Specialised organisations and facilities
State-of-the-art infrastructure
High quality services
March 2005
Vendor sophistication: Number of vendors, vendor quality
Hu
ma
n S
op
his
tic
atio
n:
Nu
mb
er o
f w
ork
ers,
lab
ou
r co
st,
wo
rker
ski
ll
leve
l
India
Indonesia
China
Philippines
Ireland
Germany
UK
USA
Singapore
France
Low
High
High
Skill surplus End-user countries Regional Hubs
The Intellectual Advantage
India is today a mature region for IT offshore work
March 2005
The Knowledge Advantage
56000
160000
284000
430114
522250
650000
0
100000
200000
300000
400000
500000
600000
700000
1990-1991
1996-1997
1999-2000
2000-2001
2001-2002
2002-2002
Knowledge Professionals Strength
Large pool of highly talented software professionals
Highly qualified pool of IT professionals
March 2005
The Cost Advantage
2.4
5.88 6.4 6.5 7.2 7.2 88.9
25 28
6
0
5
10
15
20
25
30
Average wage / year (in thousand US dollars)
Source: NASSCOM
Costs for offshore work 30-50% lower than in US/Europe
March 2005
The Infrastructure Advantage
Standardisation Testing and Quality Certification (STQC) programme
Software Technology Parks
One-stop solution to all quality requirements of electronics industry
Exemptionfrom local
duties and taxes
No corporate
income tax up to
March 2010
Up to100% foreign equity
permitted
Singlewindow
governmentclearance
Single point custombonding
and export
certification
March 2005
The Policy Advantage
IT Act 2000
EOU status extended to hardware
manufacturing units
USD 2580 mn to be spent on e-Governance
initiatives
Priority sector status given by banks
Export processing zones established
487 information communication centres
Evolving regulatory regime
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Contact in India
National Association of Software and Service Companies (NASSCOM)
International Youth CentreTeen Murti MargChanakyapuriNew Delhi - 110021
Tel 91 11 23010199Fax 91 11 23015452 Email [email protected]
March 2005
Contact in India
MAIT
4th Floor, PHD HouseOpp. Asian Games VillageNew Delhi 110 016
Tel 26855487/26866976/26866976Fax 26851321Email [email protected]
March 2005
Contact in India
Confederation of Indian Industry (CII)
23, Institutional AreaLodi RoadNew Delhi – 110003
Tel 0091 11 24629994-97Fax 0091 11 24626149/24615693E mail [email protected]