 |
 Back to 2005 Press Releases
|
India ICT Industry at a Crossroads says Gartner |
 |
| India ICT market remains the fastest growing in world - local companies ignore at their peril |
Mumbai, India — 31 August 2005: Indian Information & Communications Technology (ICT) companies may be missing a significant opportunity by concentrating their efforts on India's much-hyped export market and failing to capitalise on the country's burgeoning domestic market, Gartner warned today. Speaking at the Gartner Summit India 2005 in Mumbai, analysts said that India continued to have the fastest growing ICT market in the world, and predicted a combined annual growth rate (CAGR) of 19 percent from 2004 through 2008. Though starting from a much smaller base, this is significantly faster growth than the second fastest growing ICT market in the world - China. Gartner estimates that ICT spending in India will surpass US$54.8 billion by 2008, a rise from US$29.5 billion in 2004.
"India is one of the few countries in the world where the impact of the services export oriented business far outweighs that of the domestic side," said Partha Iyengar, research vice president at Gartner. "The overall impact of ICT development in the country is skewed heavily around the unique dynamics of this services export trend, often to the detriment of the domestic opportunity."
Whilst some Indian service providers are making a name in certain global markets, such as IT services and business process outsourcing (BPO), it is the global players that are firmly entrenched in the Indian domestic market. Domestic vendors currently account for only 42 percent of total ICT spend in India. Mr Iyengar said, "The dominance of foreign providers in India is driven by a combination of a lack of credible domestic ICT infrastructure providers - other than in the Telecom space - and the benign neglect of the emerging and growing domestic services business by the major Indian service providers. Unless action is taken now, domestic providers could see their share of the Indian market slip further."
Mr Iyengar further counseled that India's much prized export-focused industry, currently estimated to be worth around $16.5 billion, could ultimately be under threat if local providers fail to gain ground in the domestic market. According to Gartner, Indian businesses are increasingly turning to multinational brands in the outsourcing of high-profile contracts. Gartner believes that if Indian technology providers have no standing in the local market and are thus unable to compete for these higher-end (transformation oriented) deals, it will hamper their future prospects in pursuing similar deals in international markets.
"This scenario creates an interesting range of possibilities on how India's ICT business might unfold over the next few years," said Mr Iyengar. "The possible paths will be predicated by a complex combination of vendor, government and end-user behaviour over the next few years. The impact of outside forces in the form of global treaties or national trade barriers could also have a profound impact on the future growth of ICT in India. So, in a manner of speaking, India is not completely in control of its own destiny with regard to its domestic ICT industry."
Gartner has defined three potential scenarios for India's ICT industry in 2010. Each scenario highlights six parameters: Domestic ICT Industry, ICT Export Industry, Social Impact, Political Impact, Overall Economy and ICT Standards.
Gartner's first scenario, 'Global ICT Superstar' is characterised by balanced development of both the domestic ICT industry and export strength. It assumes a high level of government support with the India ICT industry driving policy as well as defining new global standards. It would lead to a strong economy and a large majority of the population would stand to benefit.
In the second scenario, the domestic ICT industry would continue to be dominated by foreign multinationals and the export market would struggle for survival. According to Gartner, in this scenario, dwindling government interest in the ICT industry would lead to a re-focus on other industries and the country's digital divide would be pronounced.
In the third and final scenario, India would cease to be a global ICT player, largely ignoring global standards and protocol. Gartner predicts that this scenario would lead to economic malaise in IT-centric states as the focus on the ICT industry rapidly evaporated.
Mr Iyengar concluded, "Clearly the ICT industry in India stands at a crossroads. If technology providers, end-users and government can work together to pursue the path outlined in the first scenario then India will not only prosper but also serve as a model for market development in other emerging countries."
Press Contact:
For further information, please contact Bite Communications on Tel: +44 (0)20 8834 3508 or email: gartner@bitepr.com.
|
About Gartner:
Gartner, Inc. is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has over 3,900 associates, including more than 1,100 research analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
|
|
|
|
|
