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Mumbai (pte031/11.02.2005/13:45) - India's IT industry is set to continue to boom by providing cheaper services to global companies. However, bad infrastructure and strain on talent availability could dull its competitive edge. As the Economic Times http://www.economictimes.indiatimes.com reports, this was the conclusion that the summit of the National Association of Software and Service Companies (Nasscom) http://www.nasscom.org came to. However, although India remains the world's leading destination for IT outsourcing, experts have begun to question the sustainability of growth given the labour cost surge and pressure on talent availability due to rapid growth in demand.
"While we are growing at a very healthy rate, we are still small in the world. We are not yet an IT superpower," said Kiran Karnik, Nasscom's president. "We need massive investments to boost physical infrastructure for the IT industry. IT hubs like Pune, which has six million people, doesn't have an international airport, people spent hours in traffic jams in cities like Bangalore and Mumbai, and a small stretch of road can't be built even in a year's time. Inadequacies like these do impact companies' bottom lines and act as roadblocks in the way of achieving higher growth rates on a sustainable basis in the industry," he added.
The total value of IT and BPO (business process outsourcing) services sourced from India in 2004 is estimated at 17.2 billion dollars (13.4 billion euros) - over a third higher than the value of services sourced from Canada, the next preferred destination. The industry is expected to expand by 25-30 per cent annually over the next few years. "We see enormous growth potential here in the coming years and a golden opportunity for global players like Siemens to tap this outstanding talent," said Heinrich Pierer, chairman of Siemens.
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