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The Indian IT & Business Services (ITBS) market was valued at $6.96 billion and recorded a 6.4 per cent year-on-year growth in the first half of 2021 (Jan-Jun) compared to 5.1 per cent in H1 CY2020, according to the International Data Corporation’s (IDC) worldwide semi-annual services tracker. The increase in growth rate was primarily due to the continued focus on digital transformation initiatives by enterprises in the country.
Covid impact
“Despite the harsh second wave of the Covid-19 pandemic, enterprises continued to invest in digital transformation initiatives to address the change in business models, streamline operations, enhance customer and employee experience, and improve overall resiliency.
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“Verticals like government and manufacturing, which delayed IT investments in 2020, hiked up their IT spend in H1 CY2021, and enterprises in the country continued to increasingly depend on IT service providers for solutions in areas like cloud, security, artificial intelligence and analytics. With the vaccination drive picking up pace, the overall economy and consumer demand are expected to bounce back to pre-Covid levels, thus driving the Indian IT services market in the upcoming months,” said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.
Majorly IT
The IT Services market contributed to 78 per cent of the market and grew by 7.3 per cent in H1 CY2021 compared to 5.7 per cent in H1 CY2020.
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Further, as per IDC, the IT & Business Services market will witness an increased momentum in the upcoming cycles due to the revival of the economy and continued increased spending in areas like cloud, security, artificial intelligence, etc. It is projected to reach $19.93 billion by the end of 2025, a CAGR of 8.2 per cent between 2020 and 2025.
Three classifications
IDC classifies the IT & Business Services market into three primary markets — Project-Oriented, Managed Services, and Support Services. For H1 CY2021, project-oriented services registered the highest growth rate at 7.2 per cent, followed by managed services at 6.2 per cent, and support services at 5.3 per cent.