Reviving US economy will boost Indian IT exports in FY 11
13 Apr 2010
According to the latest reports from global technology research firms a strong rebound in IT spends in the US and other major economies in 2010 is on the cards. The projection is based on the December 2009 quarter recovery for IT products and services and anticipated US economy revival as also demand growth in user industries.
This lends support to the market's expectation of a recovery in business fundamentals for Indian ITexporters with top IT companies expected to report 4-6 per cent volume growth for the March 2010 quarter. Additionally, according to analysts Infosys, the second largest IT player in the country would project a lower double-digit revenue growth for FY11, much stronger than the estimated 5 per cent increase for FY10.
Validation of the market's projection has come from global research agencies, Gartner and Forrester Reasearch, with Gartner forecasting a 5.3 per cent increase in global IT spends in 2010 as compared with the 4.5 per cent drop in 2009.
Forrester projects the growth in 2010 to be somewhat faster at 7.7 per cent that would be mainly driven by a strong 8.4 per cent growth in the US demand and another 8.3 per cent jump in the Asia Pacific region. The markets together account for around two-thirds of the global IT purchases of $1.5 trillion.
Adjustments for cross-currency fluctuations reduce the estimates but according to projections of Forrester, growth in the global IT purchases in segments including software, IT consulting and systems integration and IT outsourcing in 2010 would more than make up for the declines seen in 2009.
The cheering news for IT exporters in India is that sectors of the US economy such as finance and insurance, utilities and telecommunications, manufacturing and healthcare that had cut back 6-10 per cent on IT spends in 2009 are expected to spend more on IT in 2010.
