New Delhi: India's leadership position in the IT-ITeS space globally may be well established, but challenges around protectionism, wage inflation and currency volatility need to be addressed, a government document said Wednesday.
India accounts for more than 55 percent of the total global sourcing market (excluding engineering services and R&D) in 2013 as compared to 52 percent in 2012, said the Economic Survey, 2013-14, tabled in Parliament by Finance Minister Arun Jaitley.
Flat entry-level salaries, flattening employee pyramid and fast career growth are helping India "stay 7-8 times cheaper than source locations and 30 percent cheaper than the next nearest low-cost country", it added.
"However, challenges around protectionism, increased competition, currency volatility, wage inflation and inconsistent levels of customer confidence have to be addressed," the Survey said.
IT-Business Process Management (BPM) sector (excluding hardware) is estimated to have grown by 10.3 percent to USD 105 billion in 2013-14.
Of this, exports with a major share of 81.9 percent grew by 13 percent, while domestic revenues fell by one percent in dollar terms.
The Survey said a gradual revival in consumer confidence leading to return of discretionary spending and increased demand from the US and Europe is helping drive exports.
Domestic revenue is estimated to have increased by 9.63 percent in rupee terms, it added.
"In 2014-15, higher growth is expected in both exports and domestic revenues," the Survey said.
The National Policy on Information Technology envisages revenues of the IT and ITeS industry expanding from USD 100 billion in 2011-12 to USD 300 billion by 2020 and exports from USD 69 billion in 2011-12 to USD 200 billion by 2020.
The IT-BPM sector is also a big employment generator with direct employment projected to grow 5.6 percent, reaching 3.1 million in 2013-14 with over 1.66 lakh jobs being added during the year (of which 30 percent were for women).
Indirect job creation is projected at 10 million, the Survey said.
