IT Spend On Outsourcing To India To Double In 03: Merrill Lynch

New Delhi: | Updated: Oct 18 2002, 05:30am hrs
The Indian IT sector continues to make inroads in the US and Europe with the total IT spend to be outsourced to India by the global companies set to double from the present 3 per cent to 6 per cent in the next calendar year.

These are the findings of the latest quarterly CIOs (chief information officer) survey conducted by Merrill Lynch for the quarter ended September this year. The survey covered 50 CIOs from major IT organisations, both commercial (Fortune 1000) and government.

It revealed that India is gaining from work being shifted out from high cost contractors in the US and Europe. Of the total CIOs, 67 per cent had not outsourced to India so far, but some CIOs intend to start outsourcing to India in the year 2003 and the percentage of CIOs with no outsourcing to India will fall to 56 per cent next year, a report of the survey stated.

While the overall global IT services environment remains weak, CIOs report uncertainty, cautious spending and delay in contract awards. The survey shows that CIOs expect the IT budget to grow by only 2.5 per cent next year even if the recession continues. However, a few CIOs still see significant cuts in IT spending but others expect no drastic cuts. The survey also indicates project pricing modestly down in India, in line with US-based consulting services charges over the last six months. However, 62 per cent of the CIOs in the survey have reported flat or higher pricing in recent months.