Indian IT Companies Double Global Market Share

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Mar. 27 – A report by Indian Brokerage Firm Angel Broking states that Indian IT outsourcers have doubled their share in total worldwide IT spending over the past six years. Furthermore, the larger Indian IT companies have performed better than other global players in the same period.

In 2007, India’s IT companies accounted for US$31 billion, or 4.8 percent of the worldwide IT spending of US$641 billion. This year, it is estimated to have risen to US$77 billion, or 9.8 percent of the global total IT spending of US$785 billion.

The report also finds that the Indian outsourcers’ share in the total revenues of the top 13 global IT companies rose from 7.7 percent in 2007 to 14.3 percent in 2012. Meanwhile, the share of non-Indian IT multi-national corporation’s dropped from 92.3 percent to 85.7 percent.

Angel Broking’s report suggests that India’s IT gains in the global market was driven by labor cost. Whilst the labor cost advantage for Indian IT has been decreasing, it is still 20-25 percent cheaper for clients to use Indian outsources due to the availability of India’s young workforce.

“The emergence of India’s young workforce is beginning to have a global impact, as China’s did 20 years ago,” said Chris Devonshire-Ellis, Regional Partner of Dezan Shira & Associates for India and South-East Asia. “That dynamic will continue to shift from China to India over the coming decade, and will impact upon increasing numbers of industries, especially in the export manufacturing sector. However, Indian IT companies in particular cannot purely rely on cheap labor overheads and must continue to innovate.”

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

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