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India and China’s Domestic Software Markets

September 23rd, 2002 · No Comments

From India Must Develop Domestic Market by Rajesh Kalra:

In 2000-2001, Indias total software production (including IT enabled services) was $8.4 billion. Out of this, exports accounted for $6.2 billion and domestic market for a mere $2.2 billion. A year later, while the total reached an estimated $10.2 billion, exports touched $7.6 billion, and the domestic industry sputtered to $2.6 billion.

Contrast this with China, the country we dont often but should choose to compare our software skills with. Chinas total software production in 2001 was $9.6 billion, of which, exports accounted for a mere $0.7 billion. Several would term this as a no-contest, because they tend to weigh success in software with exports performance alone. If that were the case, then yes, India is clearly ahead. But such an attitude is fraught with danger. No country can really be a leader in any field unless it has a strong and resilient industry supporting it domestically.

Some statistics by way of comparison:

China has a PC penetration of 21.6 per 1,000, against Indias 5.7. In the year 2001, it is estimated that the number of PCs sold in India hovered around 1.8 million. China during the period sold around nine million PCs. As for the total installed base of PCs by 2001, while the figure for China stands at 27.5 million, India has a base of under six million.

Then there are comparisons of per capita IT spending and IT spending as percentage of GDP. While Chinas per capita spending on IT is $8.9, Indias is low at $2.4. And Indias IT spending is 0.5 per cent of its GDP whereas Chinas stands at 1.1 per cent.

Tags: Emerging Markets

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