India is likely to capture around 15% of the more than $54-billion knowledge process outsourcing (KPO) industry worldwide by 2010 from the current 5%. It is estimated that the total market size of KPO business in India may rise to $15.5 billion, up from $1.2 billion now. Also, there will be a 45% growth rate in the Indian KPO segment vis-à-vis 25% in the business process outsourcing (BPO) segment. The KPO industry will generate 250,000 jobs in the next five years.

The total U.S. legal offshoring business amounts to $25-billion and India is well positioned to tap this sector. India can earn the combined revenue of $4.7 billion from U.S. private law firms and corporations by 2011-12. About 33,000 more lawyers are needed by law firms to achieve this target, while there are only 50-60 LPO firms employing 700 lawyers currently. The current legal offshoring content of the Indian LPO industry is worth $60-$80 million.

India’s software and services exports, including IT-Enabled Services (ITeS), has increased by 32.29% to about $6.4 billion (Rs. 29,500 crore) in April-June quarter as compared to the same period last year. Export of computer software and services including ITeS is expected to rise by 33% during financial year 2006-07 to about $30.5 billion (Rs. 140,000 crore) as compared to about $22.8 billion (Rs. 105,000 crore) during 2005-06.

The Indian IT sector has maintained its high growth of 33% in 2005-06 by clocking total turnover of about $35.5 billion (Rs. 164,000 crore). India’s software and services exports registered a growth rate of 33% to reach $17 billion (Rs. 78,134 crore) in fiscal 2005-06; while Indian IT exports grew at 36% during the same period to touch the mark of about $23.5 billion (Rs. 108,511 crore). Tata Consultancy Services (TCS), India’s largest IT services company remained at number one position with its revenue growing by 40% to $2.5 billion (Rs. 11,595 crore). TCS was closely followed by Infosys Technologies, country’s second largest IT services company which posted a 32% growth to clock revenue of about $2 billion (Rs. 8,977 crore) in 2005-06.

The number of online shoppers is growing faster than the growth of the Internet in India. The number of Indians shopping online grew 42% in the year 2005, compared to the 22% growth in the number of Internet users. Roughly one fourth of the total user base i.e. 5.9 million internet users, did online shopping last year to spend an estimated $0.8 billion (Rs. 4000 crore). Approximately, 66% online buyers shop from home and account for more than half (56%) of the total online spend in India. 59% of the internet users came from middle-to-low income group, and about half were from outside the top eight cities, signaling that the Internet is now becoming a mass medium in India. More than 40% Internet users preferred an Indian language website. Cyber cafes were the access point for 46% users.

Exports of Indian IT services and IT-enabled services (ITeS) have grown 33% to reach $23.6 billion during 2005-06 (FY06), up from $17.7 billion in FY05. Of the total exports in 2005-06, IT software and services grew by 33% to $17.3 billion, while exports of the business process outsourcing (BPO) industry grew 37% to $6.3 billion. By the end of the financial year 2006-07 exports of software and services will increase to $21-$22 billion, while BPO exports will touch $8-$8.5 billion. The overall growth of the industry, including both exports and the domestic market, registered a 31% increase to reach $29.6 billion, up from $22.5 billion in 2004-05.

The overall Personal Computers shipment grew at 30% to cross 4.6 million units, in the year 2005-06. Interestingly, as a trend-reversal, consumer desktops grew at 33% compared to 15% growth in commercial desktops. Total Desktop PCs sales grew 21%, while Notebook PCs shot up by 168%.

The Indian information technology-enabled services (ITeS) industry is poised to touch $10 billion by 2006-07 and $26 billion by 2009-10. Corporates are expected to continue outsourcing many of their labour-intensive business process service tasks to developing countries like India to gain cost savings and quality advantages. The demand growth in the ITeS industry is likely to be export-led, with the domestic market also expected to grow at a rate in excess of 50%. However, lack of good infrastructure is the biggest challenge which the ITeS industry in India is facing.