Even though the economic slowdown and stiff Chinese competition have slowed down the growth of India’s information technology (IT) sector, small and medium enterprises (SMEs) in the industry are upbeat about their prospects. According to a recent report, India is likely to retain its position as the global back office, and it will take some time for Chinese players to catch up with the Indian firms in the offshore services market. With its rich talent pool, easy availability of resources and cheap labour, India has been the most preferred destination for multinational companies since long. However, in the recent past, India was facing tough competition from Chinese companies that offered IT solutions at more competitive rates and flooded the international markets with their software products. Nevertheless, the report findings have provided a breather to jittery investors and market players, whose confidence on the Indian ITeS market was shaken by the threat posed by Chinese competitors. The report also negated the market perception that recession and growing competition from Chinese players would affect the business volumes and revenues of small and mid-sized Indian ITeS firms. In contrary, Indian SMEs are likely to remain leaders in the offshore market in spite of the unfriendly business environment and strong competition. Last year’s IT export figures and official statistics further validate the point that India is still ahead of China in the offshore market. India generated close to $40 billion in proceeds from IT and IT-based services during last year and nearly 80% of these revenues were generated by software exports. The country’s share in the $70 billion global offshore market is estimated to be 45%. Though the industry report forecasts good times ahead for Indian ITeS firms, it is necessary for these enterprises to closely follow market movements to score over their competitors. Increased focus on providing value-added services and enhancing operational efficiency can go a long way in helping India maintain its top slot as theears.
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