What will be the future of IT in India?

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What will be the future of IT in India?

On one hand there is Recession in the US and on the other hand there is a potential Domestic IT market in India in the long run.

Till recently in 2006, the IT exports from India were accounted 60% by the US, 20% by the UK and rest by other countries and India’s Domestic IT market. Recession in the US has changed this scenario. There have been may job cuts, lay-offs and cost cuttings specially by the companies which work for clients from US. Followed by this many new strategies are emerging like «reduce employees, increase the workload» to counter balance the effect of recession.

The US government is all set with various plans and strategies [2] to recover from the effect of recession. But no one knows about the future. We can only speculate the aftermath of the plans yet to be implemented. We can only work hard and hope for the better, after all it affects the Indian economy as well to a very large extent.

Did you see the point here? Well, the point is that even if the US does not complete recover from the recession right not, it «will» recover slowly. It will take its time to improve but will not atleast worsen the situation assuming that the new US Government policies are implemented and practiced successfully.

For the good news, you might/not be surprised to know that there is a lot of scope in Domestic IT market in India.

Domestic IT spending is expected to increase further in the coming years due to increase in telecom and internet penetration, higher IT budget allocations by the governments, IT spending by BFSI (banking, financial services and insurance) sector, manufacturing and engineering firms, automobiles and retail sector, and greater focus on maintenance and security infrastructure by vendor firms. [1]

This means that there is a large scope for ventures that can be done with IT in mind.

According to the Broadband Policy 2004 document published by the Ministry of Communication and Information Technology, Government of India, New Delhi, internet connectivity is expected to increase from 6 millions in 2005 to 40 million in 2010. A denser telephone and internet network along with increased PC ownership will provide the opportunities for increasing the rate of training people for the IT industry. [1]

This meas that there will be an increasing user base for the services/products created using the IT infrastructure.

So overall, we ( as IT workers ) need not worry about our futures. And as the universal rule «survival of the fittest» says that we continuously need to brush up our skills to be on the edge, so we just have to keep the spirit alive.

Although the domestic IT market is just marginally more than half of the export, it has started growing at a rate of 20% per year or so during the recent years. [1]

You might be temped by now to think of a venture into the Indian Domestic IT Industry. Wait! It is feasible to start your venture if you target only the urban areas ( like metro cities ). But there are some potential problems which might have to be resolved first if you target rural areas:

  • What exactly are you trying to correct in the rural areas? ( it applies to urban areas as well )
  • How well will the rural people able to use the services you build using IT? ( education, familiarity with the technology etc.)
  • How easy will it be to make it accessible to them? ( hardware, software, regualtory issues, communication issues, tarrifs etc. )

This is my effort to understand the future prospects for the IT industry in India. Your comments are welcome.