India seen world's fastest growing IT market

India was forecast Monday to have the fastest growing information technology market in the world for the current year by US-based technology research house Gartner Inc.

"The Indian domestic market is expected to grow between 25 and 30 per cent and will be the fastest growing IT market in the world," Gartner said in a press statement released in Bangalore.

"Wireless will be a key driver of continued growth in the Indian telecoms market, though rationalization of licensing regulations and interconnectivity policies will be a strong factor affecting growth in the longer term," it said.

India's booming cellular telephone market is currently witnessing a bitter price war between new low-cost wireless operators and mobile companies. Both have blocked mutal subcribers from accessing their networks.

Over the weekend, tens of thousands of subscribers of the cellular companies were in turn cut off from making calls to fixed-phone lines owned by state firms, which analysts said were working in tandem with the new low-cost mobile firms.

Gartner said technology investments by India's federal and state governments and state-owned companies would drive domestic growth.

It said the sustained global economic slowdown was working in India's favour "making it hard for US enterprises to ignore the 'huge cost arbitrage' India."

"The industry will make slow but steady progress, with a few casualties due to unrealistic expectations of some Indian providers along the way.

"Control and security issues will also result in increasing competition for Indian companies from other English speaking states, especially those near shore to the United States and Britain," Gartner said.

The research firm said India would remain the undisputed leader as an "offshore business process outsourcing" destination.

"The industry size will grow and investments in captive units of large multinational corporations will continue to be the key driver in the industry," it said.

Gartner predicted Asia Pacific (excluding Japan) would lead a global information technology recovery with sales of IT, communications products and services almost doubling from 5.8 per cent in 2002 to 10 per cent in the current year.

It said a "more pronounced" global recovery would only happen by 2004.

"In the current scenario, one mitigating factor could be a war in Iraq. If it happens, consumer confidence in the US will plummet and oil prices will rise.

"The tenuous global economic situation will worsen, prolonging any hope of short-term IT investment recovery for the region," the research firm said.