In the era of 9% plus growth of the Indian economy and the US economic slowdown looming ahead, it becomes imperative for the IT/ITeS sector to explore its strengths, weaknesses and threats and adopt new models to sustain its growth trend.

The Indian IT/ITeS industry faced tremendous challenges for survival in 2007 due to many factors like appreciation of rupee against the US dollar, financial crisis in the US and a possible slowdown etc. But it successfully maintained its double digit growth rate and diversified its geographical risk by exploring new markets. Though the problems are not over and they are likely to remain over the foreseeable future, the industry has the ability to overcome them.

Indian IT/ITeS companies have penetrated US market substantially. The next big thing is to harness the huge Euro outsourcing market. Europe is fast catching up with the US. Various cost-cutting measures have been undertaken by the European companies and this has prompted them to outsource parts of their business to outsiders. A growth can be seen in European region revenue for all IT companies and a dip in North America's contribution. "The largest market and the best market for IT services continues to be North America", says Kris Gopalakrishnan of Infosys Technologies. For medium to long-term Infosys Technologies aims a spread of 50:30:20 w.r.t. America: EMEA Region: Asia-Pacific. In 2007 the US and UK accounted for 64% and 18% of the total export of this industry. The industry is slowly and steadily entering other European Asia-Pacific markets.

The contribution of the Indian IT/ITeS for the development of the Indian economy in terms of growth rate in GDP and foreign exchange earnings, employment generation is very important and significant (refer to Chart 1). It has also given an opportunity to the Indian IT professionals to prove their talent in the global market. The Indian IT/ ITeS sector is expected to grow at a rate of 33% and touch $64 bn by the end of current fiscal year. The share of GDP during the same period is expected to be around 5.2% from 1.2% in fiscal year 1998. During the same period the sector provided employment to approximately 2 million people.

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