IT services industry to rebound: CARE Research

Growth in the IT Services exports would be led by the emerging services such as testing and infrastructure services and the emerging verticals such as healthcare, retail, utilities and government contracts, said CARE Research.

The fiscal 2013 witnessed a slight slump in growth for the Indian IT Services since the recovery in Europe and the U.S. was slower than expected, although the rupee’s depreciation was a saving grace.

CARE Research report says IT Services exports will rebound to the early double digit growth figures over the next couple of years on the back of an improving global growth scenario, as evidenced by positive data from the US.

The traditional services such as custom application development and verticals such as BFSI and telecom, accounting for a bulk of the exports, would grow at a steady pace.

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The domestic IT Services constitutes around 22 percent of the India’s IT services industry. It has grown at a faster rate than the Indian IT Services exports in the recent past and is expected to continue the trend since India is still a considerably underpenetrated market as compared to the developed world.

Transformations in the global technology space are throwing up newer opportunities for the Indian IT outsourcers in areas such as social media, mobility, analytics and cloud computing (SMAC).

There are some challenges that are popping up are the upcoming U.S. immigration bill, which is expected to be passed in the U.S. in 2014, enforcing limitations in terms of higher visa fees, proportion of visa dependent employees in the US etc.

Non linear pricing models and avenues such as solution accelerators are driving non linearity leading to an increase in the revenue per employee for Indian IT service providers.

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