Indian IT mkt to grow by 12% in 2013: Gartner

The Information Technology (IT) services market in the country is estimated to reach $10.2 billion in 2013, a 12 per cent increase from an estimated $9.1 billion market in 2012, research firm Gartner said on Friday.

India's IT services market offers significant opportunities for IT services providers because of the increasing needs and wants of IT buyers, Gartner said in a statement.

As companies grow in size and scale, the market is likely to see larger IT services deals with more sophisticated deal engagement practices, it added.

The IT services market in India is forecast to grow by 12 per cent from an estimated $9.1 billion market in 2012 to reach $10.2 billion in 2013, Gartner said.

This market has a critical mass that is worth tapping into and has the potential to expand further with "as a service" type service offerings, it added.

"Although India's IT services growth rate has slowed in the past two years, the rate of growth remains relatively high," Gartner

principal research analyst Arup Roy said.

Services spending on the transparency and efficiency-related projects from the government like Unique Identification Authority of India and Accelerated Power Development and Reforms Programme are expected to drive service spending, Gartner said.

Government infrastructure projects will strongly drive IT, in conjunction with the expansion of the financial services and manufacturing sub-sectors, it added.

The market is also likely to see more transformation deals in banking and insurance, telecom, retail and government, Gartner said.

"Service providers wishing to enter into the Indian market, must factor in the rising infrastructure and IT labour rates, coupled with high attrition levels, in their planning exercise for their operations costs, as well as local regulations and bureaucratic challenges in establishing and operating businesses in India," Roy said.

Leveraging Tier-II and Tier-III cities (Trivandrum and Lucknow, for example) for Indian business is a tactic that could be used in conjunction with the mainstream delivery from Tier-I locations, Roy added.