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Indian IT industry to continue on growth track despite US slowdown 

New Delhi, Aug 6: The slowdown in the American economy may  have had an impact on some Information Technology (IT) companies in India but overall the sector continued on the high  growth path and would remain that way, a U S-based consultancy firm said on Monday.

''It is difficult for companies to stop funding for software as compared to hardware as they  are long-term projects so Indian companies continued to do well,'' Senior Vice President, Operations, Gartner Asia-Pacific,  Bob Hayward said. The cut in spending on hardware had impacted on South-East Asian economies and not India, he  felt. Moreover, the slowdown was sectoral as other businesses continued  to do well and they increasingly looked at India for  services, Mr Hayward said.  

The indications for the future were also encouraging, ''with the American economy likely to again  go into the high growth trajectory in the fourth quarter and a  Gartner survey of the American companies suggesting that they would start reinvesting in software and  services next year, Indian IT companies will again be called upon to provide  them,'' he said. The IT companies were the most affected by the slowdown and in  times of crisis it becomes easier to take a decision to cut flab and resort to outsourcing; so whether the times were good or bad for the  American companies, Indian IT firms will remain unaffected, he said.  

Mr Hayward said that a huge potential was waiting to be tapped in  the domestic economy and, with tremendous expansion of telecom services and Internet connectivity, this market too would grow at a  greater pace. At present the domestic IT market is growing at the rate of 50 per cent per annum, and the  Information, Telecom and Communications sector, which was 1.8 per cent of the Gross Domestic Product in  2000-2001, would grow to three per cent by 2008. The increased bandwidth would make it easier for the Indian  companies to capture the large chunk of the e-services market that had the  potential to grow up to 150 billion dollars by 2008, he said. 

Other analysts too concurred with this view and they  would deal with this and other issues confronting IT business at the second  annual Gartner Summit in India. The two-day meet titled 'Exploiting IT for Business Transformation' begins on  Tuesday and would be addressed by an expert team of international analysts and consultants.

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