India's information technology industry is estimated to cross Rs 1 lakh crore (Rs 1 trillion) in 2004-05 and employ over 10 lakh (1 million) knowledge professionals, according to National Association for Software and Service Companies.
"The Indian IT industry would cross Rs 100,000 crore ($28.3 billion) in 2004-05, thanks to the growth in IT-enabled Services (ITeS) and IT Services and Software," Nasscom president Kiran Karnik said.
The ITeS segment is expected to record a 20 per cent growth, up from 18.2 per cent posted in the fiscal year '04, IT services and Software is estimated to post 58.8 per cent (down from 59.4 per cent) and hardware at 21.2 per cent (22.4 per cent in FY'04), he said.
IT services and ITeS contribute about 78 per cent to overall industry, he said, adding that the size also includes hardware sold in India by multi-national companies.
Karnik also said that IT and ITeS sectors would emerge as the major contributors to the country's GDP, providing over 4 per cent in 2004-05, up from 3.5 per cent recorded in 2003-04 and a meagre 1.2 per cent in 1997-98.
On the employment of IT professionals, he said it would cross 10 lakh in the fiscal year '04, with software exports sector recruiting around 3.45 lakh (2.70 lakh in fiscal year '04), software domestic sector employing 30,000 (28,000) and software in-house captive staff recruitment rising to 3.22 lakh (2.90 lakh).
ITeS sector would be the largest employment generator, staffing around 3.48 lakh in 2004-05, up from 2.54 lakh jobs provided a year-ago, he said.
The Indian IT industry includes hardware, peripherals, networking, training, domestic and export market for IT services and products and ITeS-BPO segments.
On the recent trends in the sector, Karnik said the industry would exceed its target of 30-32 per cent in exports to around 34-35 per cent in FY'05, and was likely to witness a domestic IT market upsurge.
The domestic IT market upsurge would be due to the localisation of software by Microsoft Corproation and Red Hat, he added.
An increase in mergers and acquisitions - like the merger between eBay and Bazee.com, IBM-Daksh, Patni-Cymbal and Flextronics-HSS - are also likely to take place, he said.
A return of venture capitalists, who had fled after the dot.com burst, an increase in the presence of MNCs, and the country emerging as an R&D hub are also on the anvil, he said.
Emergence of global sourcing, resulting in India increasingly becoming a market place is also in the offing, he added.
However, India needs to focus on building delivery capabilities in low cost geographies, operational excellence at the activity, function and business levels, consultative selling capabilities to complement existing relationships among others.
"Security is the main concern. However, the solace is that it is a concern across the world. India should also focus on improving infrastructure," Karnik said. Lack of proper infrastructure is plaguing the growth of IT industry in India, he said.