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IT spending in India is expected to reach $ 44.8 billion in 2014 and domestic IT Investments show resilience in tough economic conditions, says latest report of International Data Corporation (IDC).
"IT Spending in India is expanding by $10 billion between 2012 and 2014. This is a significant market opportunity which opens the door for rapid revenue growth for IT vendors of all hues," said Jaideep Mehta, country general manager at IDC India.
"We specifically see rapid growth in three growth vectors: emerging Tier II and III cities, emerging segments such as the upper mid market, and emerging verticals such as education and healthcare," added Mehta.
While the US showed signs of economic recovery and Europe continued its downward slide, there was a considerable, if not substantial, impact on Asia Pacific countries. India continues to be in choppy economic waters currently, characterized by a weak investment environment, depreciating rupee and tight credit conditions. And these factors are causing companies to spend frugally.
However, the impact of economic reforms in early 2013 such as relaxation of FDI regimes in select industries is expected to drive inbound investments and have a broader positive impact going forward. India's strong fundamentals: high savings rates, rapid workforce growth and expanding middle class will continue to support brisk economic expansion in the mid to long term.
The infusion of new technologies such as the cloud and enterprise mobility, new devices such as tablets and innovative service offerings from the industry are also triggering spend on IT programmes, both in the enterprise and consumer markets.
"India's favorable demographic dividend will continue driving consumer spending on IT products (client devices and smartphones). Government and Enterprise IT investments will move into fast track mode post the elections. A lot will depend though on the new government's political and economic agenda," says Ravi Sharma, research manager, consulting group, IDC India.
The increase in IT investments by Indian SMEs indicates constant progress in business maturity levels; investments from the mid market segment is expected to grow at a significant rate of 17.2%. government initiatives and Public Private Partnerships are bridging infrastructure and R&D gaps that inhibited SME growth," said Pavan Magge, senior analyst, consulting group, IDC India.