The Hindu Business Line : IDC sees `very strong' growth for BPO sector

PREDICTING that India would be amongst the top three growing IT markets in Asia Pacific, IDC said Indian IT industry revenues would touch $55 billion by 2008, thus reflecting a compounded annual growth rate (CAGR) of 23.1 per cent between 2003-08.

"The break up in terms of exports and domestic revenues is in favour of exports, which would increase its share from 65 per cent to 71 per cent during 2003-08. The export market is expected to grow at a CAGR of 25.3 per cent (2003-08), whereas the domestic market will grow at 18.5 per cent," the IDC report released at its annual IT industry event - Directions 2005 said.

It said higher growth in exports would primarily be contributed by the business process outsourcing (BPO) or IT-enabled services (ITES) sector, which is expected to grow at a higher CAGR of 36 per cent during the period 2003-08.

For 2004, IDC has predicted a worldwide technology resurrection, and said that India would be one of the top-three growing IT markets in Asia Pacific.

In what may come as a relief to the industry, IDC had predicted that the offshore service delivery would thrive despite negative publicity. "There is a strong backlash against this phenomenon in the developed markets primarily due to concerns about growing unemployment.

A number of Governments have been concerned about the future loss of jobs... Consequently, there is a growing concern that the BPO juggernaut will slow down because of changes in public policy in developed countries. Despite such concerns, IDC believes that offshore BPO sector in India will continue to grow very strongly."

The IT services exports is expected to grow at 19 per cent during the period.

"The domestic market has revived with 17 per cent growth in 2003 after seeing the lowest growth rate of six per cent in 2002 in the last 15 years. This growth has been possible on the back of a strong global economic recovery. The other pulses have been 8.2 per cent GDP growth in India and the rising corporate profits," Mr Kapil Dev Singh, Country Manager, IDC India, said.

This makes India the fastest growing and the fourth largest domestic market in Asia Pacific region.

"This growth trend is going to continue with it peaking in 2005 at 21 per cent with all the three components — hardware, software and services expected to grow at a decent pace," Mr Singh added.