India IT services and business market to hit $13.3 billion this year - GulfToday

India IT services and business market to hit $13.3 billion this year

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IT services market in India will grow at a CAGR of 8.2 per cent between 2019-2023. Reuters

India IT services and business market is likely to grow annually by 6.9 per cent to hit $13.3 billion by the end of this year, an IDC report said on Wednesday.

According to the IDC’s ‘Worldwide Semiannual Services Tracker - 1H19,” the IT and Business Services market is further expected to grow annually by 6.8 per cent to be valued at $14.2 billion by December 2020.

The highest revenue generating segment in IT Services market continued to be Systems Integration in 1H19, on account of the shift towards modernized infrastructure and applications.

“Vendors are investing heavily on re-skilling and upskilling their workforce to gain confidence and drive more business across major verticals such as BFSI, government and manufacturing, among others,” said Shweta Baidya, Senior Research Manager, Software and IT Services, IDC India.

Vendors and start-ups are also partnering with each other to create innovation hubs, share ideas and collaborate to achieve greater synergy, through transformational projects.

The IT Services market contributed 77 per cent in 1H19 and is further expected to expand to $10.2 billion by December 2019, growing at 7.2 per cent annually.

IT Services market will grow at a CAGR of 8.2 per cent between 2019-2023, to be valued at $14 billion by the end of 2023.

“The need of the hour is quick and effective adaptation to the new digital environment, which can be achieved through the development of new skills for executing complex models in IoT, AI, ML, blockchain, data science and robotics.

“The government as well as leading organizations have already taken steps towards reskilling the IT/ITeS workforce of the country, and this is expected to further increase,” said Garima Goenka, Market Analyst, IT Services, IDC India.

Earlier Finland’s Salcomp, a supplier to US tech group Apple, said it is going to invest Rs20 billion ($278.67 million) in India to make mobile chargers and other smartphone components from March 2020, the country’s technology minister said.

Salcomp has reached an agreement to take over a facility, formerly owned by Nokia, in the southern Indian city of Chennai and will begin operations at the site by March, Ravi Shankar Prasad told a news conference. Salcomp, a major supplier of chargers to Apple for its iPhones, has reached an agreement to take over the entire facility of Nokia handsets lying closed for the past so many years, Prasad said.

“I can tell you apart from chargers and other equipment it will lead to a diversified product portfolio,” Prasad said, adding that Salcomp would invest the 20 billion rupees at the site over the next five years.

The move is expected to generate jobs for about 10,000 people, he said.

Nokia, in a statement, confirmed that it had reached an agreement with Salcomp for the sale of the facility in Sriperumbudur, Chennai.

The widening of Apple’s supplier base in India, the world’s second-biggest smartphone market, is a boost to Prime Minister Narendra Modi’s “Make in India” drive.

India has been trying to take advantage of the trade war between Beijing and Washington, which has disrupted supply chains and forced companies to look for alternative manufacturing locations.

New Delhi cut corporate tax rates in September to woo manufacturers and revive private investment. It is also making plans to attract companies such as Apple, Foxconn and Wistron to expand locally, Reuters reported previously. Apple last month started selling its iPhone XR model assembled in India by the local unit of Foxconn It also assembles the iPhone 7 model in India through Wistron’s local unit in the tech hub of Bengaluru.

On Monday, Prasad, showing a locally-assembled iPhone XR, said he expected Apple to expand its manufacturing operations further in India.

Apple’s Indian-made phones will also be exported, Prasad said, adding that exports of mobile phones and components from the country would be worth $1.6 billion each in the financial year to end-March 2020.

“I can tell you apart from chargers and other equipment it will lead to a diversified product portfolio,” Prasad said, adding that Salcomp would invest the Rs 2,000 crores at the site over the next five years. The move is expected to generate jobs for about 10,000 people, he said.

Nokia, in a statement, confirmed that it had reached an agreement with Salcomp for the sale of the facility in Sriperumbudur, Chennai.

The widening of Apple’s supplier base in India, the world’s second-biggest smartphone market, is a boost to Prime Minister Narendra Modi’s “Make in India” drive. India has been trying to take advantage of the trade war between Beijing and Washington, which has disrupted supply chains and forced companies to look for alternative manufacturing locations.

Agencies