HIGH PRIORITY MARKET - IT
SEZ ' S TO DRIVE IT SECTOR ; TIER II CITIES EMERGE AS NEW CENTERS
Trends in tier II and III cities Ü
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As of 2013 , 43 new tier II / III cities are emerging as IT delivery locations ; this could reduce pressure on leading locations
Cost in newer cities is expected to be 28 per cent lower than that in leading cities
Lower cost and attrition , affordable real estate and support from local government , such as tax breaks , STPI and SEZ schemes , are facilitating this shift of focus
Over 50 cities already have basic infrastructure and human resource to support the global sourcing and business services industry
Some cities are expected to emerge as regional hubs supporting domestic companies
IT sector employment distribution in Tier I and Tier II / III cities
175
3,230
1,821 1,615
2008 2018 Tier I locations
Tier II / III locations
Source : Nasscom , E & Y , TechSci Research
TREMENDOUS GROWTH OF GLOBAL IN – HOUSE CENTRES
Key highlights
Ü Global In-House Centres ( GIC ), also known as captive centres , are one of the major growth drivers of the IT-BPM sector in India . They also operate in engineering services and software product development .
Ü In 2015 , there were more than 1025 GICs operating out of India , across multiple locations accounting for USD19.4 billion of export revenues , almost 20 per cent of the industry export revenues , and employing > 25 per cent of the total manpower
Ü The impact of the segment goes beyond revenue and employment , as it helped in developing India as a R & D hub and create an innovation ecosystem in the country
Ü Within the captive landscape , Engineering Research & Development / Software Product Development ( ER & D / SPD ) is the largest sub-segment
Ü Companies from North America and Europe are major investors in the captive segment in India , accounting for over 90 per cent of captives in the country
180
460
Number of GIC ’ s in India
710
760 790
825
2000 2005 2010 2012 2013 2014
1025
2015
Source : Zinnov , Nasscom , TechSci Research
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