India considered top outsourcing country in the world

The information technology sector, in particular, is set to gain market potential worth $250 million by 2020

By Kamal Vachani

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Published: Thu 26 Jan 2017, 3:17 PM

Last updated: Sun 29 Jan 2017, 5:29 PM

India's rapid rate of economic growth over the past decade has been one of the most significant developments in the global economy, informed Kamal Vachani, Regional Director of Electronics and Computer Software Export Promotion Council (ESC) - Middle East.
India is the topmost offshore destination for IT companies across the world. Having proven its capabilities in delivering both onshore and offshore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India, he added.
Social, Mobility, Analytics and Cloud (SMAC) are collectively expected to offer a huge opportunity. It is reported that Cloud represents the largest opportunity under SMAC, which is increasing at a CAGR of approximately 30 per cent to around $650-700 billion by 2020. Social media is the second most lucrative segment for IT firms, offering a $250 billion market opportunity by 2020. The Indian e-commerce segment, which is $12 billion in size, is witnessing strong growth, thereby offering an attractive avenue for IT companies to develop products and services to cater to the high growth consumer segment.  
Competition, clustering and collaboration are three characteristics along with support from the Government have helped the Indian IT industry emerge as a leader in Information Technology. The ability of software firms to work together in areas of mutual benefit such as policy advocacy, overseas marketing, market research and distribution of best practices are helping them to sustain their supremacy.
The following factors have also helped in making India, which is known as the outsourcing capital of the world:

- Demand: High external demand
- National vision and strategy: To assist the IT industry in their efforts to climb up the value chain
- International linkages and trust: Diaspora, funded links; reputation and trust, partly through ISO and anti-piracy
- Domestic input factors/ infrastructure: Strong, low-cost human capital; catching up in telecoms; and access to capital
- Competition, clustering and collaboration: Riding the trend, India's IT industry is expected to continue being a million dollar baby in the years to follow. Both large as well as small and medium-sized enterprises (SMEs) segment will contribute significantly to the growth of India's economy, said Vachani.
With a share of almost 20 per cent, the export of Computer Software and IT-enabled Services (ITeS) are significant contributors to India's overall export. Estimated at $107 billion during 2015-16, the sector constitutes about 68 per cent of India's services export, which is estimated at $157 billion in 2015-16. Out of $107 billion, 79 per cent accounts for IT software, 25.2 per cent for ITeS, 2 per cent for IT product and 0.8 per cent for Embedded software, according to ESC estimation.
India today is a global leader of the outsourcing industry with half of the world's back offices located in the country. Today, the information technology industry in India has gained a brand identity as a knowledge economy due to its IT and ITES sector, Vachani concluded.

Kamal Vachani is the Regional Director of Electronics and Computer Software Export Promotion Council (ESC), which is a nodal agency of the Ministry of Information Technology, Government of India.

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