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Advantages & benefits of India

* Well recognized Information Technology skills
* Wide gap between personnel costs in India and developed countries
* Combination skill sets easily available (For example computer and legal or medical skills)
* Strong government support for such activities
* Excellent training infrastructure
* Lower infrastructure costs
* Rapid turnover of engineers and skilled people
* India is a talent-rich country with more English speaking IT talented peoples
* Excellent Telecom infrastructure in major cities and the telecom costs have dropped by about 85% in 3 years.
* India has a stable government & it is one of the world's fastest-growing economies
* India proved better than China on account of several factors. The study pointed out that China lags behind India in terms experience and other important factors like IT and management education, language skills, concerns about intellectual property and overall country risk.

SIZE

* India is the leading destination for providing IT and IT-Enabled Services (ITeS), with revenues of about US$40 billion in 2006-07 of which:
o IT Services and Software constituted 58%, ITeS about 21%, and the domestic market about 21%
o Exports constituted 79% of the total IT and ITeS revenues

STRUCTURE

* The industry has 3 broad categories of companies:
* Indian IT and ITeS companies ranging from large companies (Tata Consultancy Services, Infosys, Wipro, HCL) to small niche companies
* Global IT companies such as IBM, Dell, Microsoft, HP, Accenture, etc. all of whom have set up development centres in India
* Captive back office operations of large global corporations like JP Morgan, American Express, GE, HSBC, British Airways, etc.

POLICY

* 100% FDI is permitted in this sector under the automatic route
* SEZs, EOUs and Software Technology Parks have been set up across India – income tax exemptions are available for units in these designated areas/zones
* IT Act, 2000 legalises the acceptance of electronic records and digital signatures providing a legal backbone to e-commerce

OUTLOOK

* The Indian IT and ITeS industry is expected to grow to US$77 billion by 2010
o Over 25% p.a. CAGR expected
o Exports expected to reach US$60 billion in 2010

POTENTIAL

* India’s inherent IT capabilities - talented workforce and world-class companies
o Availability of technically skilled and English-speaking labour force at a fraction of the costs in USA and Europe
o Quality orientation, project and process management expertise
o Enhanced global service delivery capabilities of Indian companies through a combination of greenfield initiatives, M&A, alliances and partnerships with local players
* International recognition of India’s strengths
o Increasing awareness among global companies about India’s capabilities in higher, value-added activities and in the Global Delivery Model
o Leading international companies have identified custom application development and maintenance as priority areas due to a high offshoreable component
* High growth of domestic IT & ITeS market due to several regulatory and technological factors:
o Increased investments by enterprises in IT infrastructure, applications and IT outsourcing
o Demand for domestic BPOs has been largely driven by faster GDP growth and by sectors such as telecom, banking, insurance, retail, healthcare, tourism and automobiles.
* Opportunity to supply to the global market in addition to serving the growing domestic demand

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