Growing Clout

- Ed Nair

The domestic IT services market crossed the ₹1000 Bn (one lakh crore) mark this year to touch ₹1,00,155 cr. (approx $15B) growing at 8% over the previous year as per DQ estimates. However, going by Nasscom’s figure, it was at ad higher at Rs.1,01,840 cr., while Gartner has been more conservative with a domestic IT services market size of ₹83,596 cr. (converted from $12.48 B). Nonetheless, domestic IT services is a big piece of the overall market in India— nearly one-thirds to two-fifths of the overall domestic IT market in India.

“IT services spending is projected to have the highest growth rates as companies work towards creating digital applications on which enterprise organizations’ digital business models are being built,” according to Partha Iyengar, Gartner Fellow and head of research at Gartner India. Added to this is the impetus expected from government spending on IT which would be a huge growth driver for overall IT spending and IT services in particular.

The government’s expected investments in digitization, infrastructure improvement, implementing technology in healthcare, manufacturing and agriculture sectors is expected to provide an opportunity of around USD 5.9 billion to the IT services sector, states Strategic review 2017 report from Nasscom. This translates to nearly ₹39,500 crore (at current exchange rate) for the next few years.