labels: Economy - general, Gartner
US downturn unlikely to hit Indian IT industry: Gartner news
19 February 2008

Mumbai: IT industry in India was unlikely to witness a downturn in the event of a slowdown in the US, but could see a lengthening of sales cycles, a top official of global IT research company Gartner said.

India's IT market is estimated to grow at a five-year compound annual growth rate of 20.3 per cent to reach $24.3 billion by 2010. IT spending by Indian firms have increased by 13 per cent as against the world average of 3.3 per cent for 2008, Gartner said in a worldwide survey.

"There is no sign at this point and no evidence of a slowdown and India will continue to grow at a rate of 25-30 per cent," Gartner vice president Partha Iyengar said.

"It is unlikely to have a strong endemic but there could be some lengthening of sales cycle," he added.

He, however, pointed out that the country faced supply side constraints in terms of employable manpower.

"Only 25 per cent of the total graduates in India were employable," he said.

Iyengar, however, said there could be some cross industry hiring and wage costs could rise.

Gartner senior vice president for research Peter Sondergaard wanted companies of western Europe, North America and Japan to draft a shadow IT budget to factor in a cut, if any in it spending.

"IT cost as a ratio to revenues will start to decline in the long term," he said.


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US downturn unlikely to hit Indian IT industry: Gartner