The report claims the domestic IT services market will go through a boom phase during 2004 and beyond. Gartner group vice-president and chief of research Craig Baty has been on record saying that at a growth rate of 17.3 per cent, India is expected to be the fastest growing IT services market in the Asia-Pacific region as compared to the global average of six per cent, making it faster than its Asian counterparts, including Singapore, China and Australia.
By 2008, Indian domestic market will be almost 1.5 times the size of the Singapore market. The growth will primarily be driven by government contracts, banking and financial services industry (BFSI) and manufacturing sector, he said in the report.
While the Indian IT service firms have been trying to penetrate deep into the US markets, global players which have development centres in India have started targeting the domestic IT services market. Ravindra Datar, principal analyst, IT Services (India) and BPO (Asia Pacific), Gartner, said: 2004 is expected to mark the beginning of a rapid-growth period for the Indian IT Services market. The prominent growth drivers are expectations of a stable economic growth, increased global competitive pressures on local industry, improving infrastructure, increasing investments in setting up offshore IT and BPO facilities in India. With such strong growth expected, Indian players should look beyond the creamy layer of the market to recognise the huge potential hidden in the SMB sector.