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The Current Status
  • The Indian information technology industry has played a key role in putting India on the global map. According to the National Association of Software and Service Companies (NASSCOM), the apex body for software services in India, the revenue of the information technology sector has risen from 1.2 per cent of the gross domestic product (GDP) in FY 1997-98 to an estimated 5.8 per cent in FY 2008-09.
  • India's IT growth in the world is primarily dominated by IT software and services such as Custom Application Development and Maintenance (CADM), System Integration, IT Consulting, Application Management, Infrastructure Management Services, Software testing, Service-oriented architecture and Web services.
  • The exports turnover will touch US$ 80 billion by 2011, growing at an annual rate of 30 per cent per annum, from the earlier few million dollars worth exports in early 1990s.
  • As per NASSCOM's latest findings:
    • Indian IT-BPO sector grew by 12 per cent in FY 2009 to reach US$ 71.7 billion in aggregate revenue (including hardware). Of this, the software and services segment accounted for US$ 59.6 billion.
    • IT-BPO exports (including hardware exports) grew by 16 per cent from US$ 40.9 billion in FY 2007-08 to US$ 47.3 billion in FY 2008-09.
  • Moreover, according to a study by Springboard Research, the Indian IT services market is estimated to remain the fastest growing in the Asia-Pacific region with a CAGR of 18.6 per cent.
  • Despite the uncertainty in the global economy, the top three IT majors- Infosys, TCS and Wipro-have seen revenue growth from all important sources of income: from the North American and European regions, in the financial services vertical and from application maintenance and development (ADM) offerings between fiscal years 2008 and 2009.
  • The Indian Software and services industry is export driven. In 2008-09, the total value of software and services export is estimated at Rs. 2,16,300 Crores (US$ 47 billion), an increase of 31.6 per cent in rupee terms and 16.3 per cent in dollar terms. The production and growth trend of the Indian Electronics and IT/ITeS industry since 2003-04 has been as follows:

    Year Production (Rs. Crores) Growth (%)
    2003-04 118,290 21.9
    2004-05 152,420 28.9
    2005-06 190,300 24.9
    2006-07 244,000 28.3
    2007-08 295,820 21.2
    2008-09 368,220 24.5

    Tamil Nadu exported Rs.36680.40 Crores during 2008-09 (11% of India's exports). At present, 1683 IT companies operate in Tamil Nadu employing about 285,000 software professionals.

The Market
  • Outsourcing: A research by Gartner forecasts India as the undisputed leader in the outsourcing space in the year 2008. India's most prized resource is its readily available technical work force. India has the second largest English-speaking scientific professionals in the world, second only to the US. It is estimated that India has over 4 million technical workers, over 1,832 educational institutions and polytechnics, which train more than 67,785 computer software professionals every year. The enormous base of skilled manpower is a major draw for global customers.
  • According to NASSCOM software and services exports (including exports of IT services, BPO, engineering services and R&D and software products) reached US$ 47 billion in FY 2008-09, contributing nearly 78 per cent to the total software and services revenue of US$ 59.6 billion.
  • Domestic Markets: India's domestic market has also become a force to reckon with, as the existing IT infrastructure evolves both in terms of technology and depth of penetration. According to NASSCOM, domestic IT market (including hardware) reached US$ 24.3 billion in FY 2008-09 as against US$ 23.1 billion in FY 2007-08, a growth of 5.3 per cent.

  • India Inc's demand for IT services and products has bolstered growth in the domestic sector with deal sizes going up remarkably and contracts worth US$ 50 million-US$ 100 million up for grabs.
  • Future Outlook: Services and software segments are estimated to cross USD 1.2 trillion by 2012. This is more than the 5.2 per cent growth expected in the total IT spending. The huge potential for global sourcing is further highlighted by an addressable market size of USD 500 billion in 2008, which is more than five times bigger than the current market.
  • Road Ahead: According to a report prepared by McKinsey for NASSCOM, the exports component of the Indian industry is expected to reach US$ 175 billion in revenue by 2020. The domestic component will contribute US$ 50 billion in revenue by 2020. Together, the export and domestic markets are likely to bring in US$ 225 billion in revenue, as new opportunities emerge in areas such as public sector and healthcare, and as geographies including BRIC and Japan opt for greater outsourcing.
Why Tamil Nadu?
  • The largest pool of technically qualified high class IT manpower in India - Out of annual Turn-out of 136,000 Engineering Graduates from 355 Engineering colleges in Tamil Nadu, 37% are with Computer Science or IT or Electronics & Communication discipline.
  • Tamil Nadu enjoys a cost advantage of around 60-70 per cent as compared to source markets. Additional productivity improvements and the development of tier 2/3 cities namely Coimbatore, Thirunelveli, Madurai, Salem, Trichy and Hosur as delivery centers, is expected to enhance Tamil Nadu's cost competitiveness.
  • Enormous skilled human resource compared to developed countries leading to lower manpower cost nearly one tenth of those in developed nations, thus giving Tamil Nadu a big comparative advantage.

  • Offers a wide range of services from support / data processing to sophisticated software systems etc.
  • Rich experience of working with large global companies and enjoy high credibility.
  • Expertise on a wide variety of platforms.
  • 1683 Software Exporting units with an export performance of Rs.36680 Crores (US $ 8120 million) employing about 285,000 Software professionals.
  • Tamil Nadu had the highest Growth rate in software exports in India : 29.04%.
  • Tamil Nadu exported 58% of its total IT exports to USA followed by UK (12%).

Government Support
  • Income tax exemption: Section 10A of the Income-tax Act, 1961 provides for 100% deduction of profits and gains derived by an undertaking from export of articles or things or computer software manufactured or produced by it. This facility is available till the to assessment year 2010-11.
  • Government of Tamil Nadu has introduced an Innovative ICT Policy 2008. Under this Policy, the Government offers attractive incentives. (www.tn.gov.in/misc/ictpolicy2008.pdf)
  • TIDCO and ELCOT had promoted TDEL IT Park in 2000-01 with a built-up space of 1.28 million which became an iconic facility. (www.tidelpark.com)
  • SIPCOT has promoted an IT Park at Siruseri in an area of 756 acres which has some big names like TCS, Cognizant, Xansa, Syntel, Hexaware, Patni, Polaris, etc. (www.sipcot.com)
  • TIDCO and ASCENDAS have jointly promoted another IT Park at Taramani in Chennai. (www.itpchennai.com)
  • At present, 28 operational IT SEZs in Tamil Nadu.
  • 234 IT Parks in pipeline in Tamil Nadu with a built-up space of 131 million sq. feet in Tamil Nadu.
  • Chennai has the largest bandwidth in India - 13.52 tbps through two submarine OFC cables linking Chennai with the rest of the World.
  • ELCOT is currently developing IT SEZs in Tier II cities namely Coimbatore, Madurai, Thirunelveli, Salem, Trichy and Hosur. (www.elcot.com)
  • TIDCO is implementing a state-of-the-art ITES SEZ with about 4.00 million sq.ft. built up space on 26.64 acres of land in Thiruvanmiyur village in Chennai District and, Kottivakkam Village in Kancheepuram District. The project is being implemented through a joint venture with M/s. DLF Limited. The estimated cost of the project is Rs.1500 Crores. The project is expected to provide employment for about 50,000 persons. (www.tidoc.com)
  • TIDCO is implementing a state-of-the-art SEZ for IT-ITES with an Integrated International Convention Center on 25.27 acres of land in Kanagam village and Thiruvanmiyur Village in Chennai District. The project would have minimum built up space for IT&ITES and commercial activities of about 4 million sq.ft., and an Integrated International Convention Center to seat 1500 delegates along with 275 Serviced Apartments and Suites. The consortium led by M/s. TATA Reality & Infrastructure Limited are the joint venture partner for implementing this project. The project is estimated to cost Rs.3000 Crores and provide employment to over 50,000 persons.
  • TIDCO is establishing a IT-ITES SEZ at Sholinganallur, Tambaram Taluk, Kancheepuram district through a joint venture with Nuziveedu Seeds Limited (NSL), Secunderabad, to build about 73 lakh sq.ft. for ITES Space, residential, retail and a 150 room hotel in an area of 66 acres of land; at an estimated cost of about Rs.1500 Crores. This project will generate employment for about 25,000 persons.
Notified IT/ITES Special Economic Zones in Tamil Nadu
S.No Name of SEZ Location & District Type of SEZ
1 Tata Consultancy Services Limited Siruseri & Egattur, Chennai IT / ITES
2 Syntel International Pvt Ltd Kancheepuram IT / ITES
3 ETL Infrastructure Services Ltd Tambaram Taluk, Kancheepuram IT / ITES
4 Hexaware Technologies Limited SIPCOT IT Park, Siruseri IT / ITES
5 Shriram Properties and Infrastructure Private Ltd Perungalathur village, Chennai IT / ITES
6 Coimbatore Hitech Infrastructure Pvt Ltd Keeranatham Village, Coimbatore IT/ITES
7 DLF Infocity Developers (Chennai_ Ltd Manapakkam & Mulivakkam, Kancheepuram Distt. IT / ITES
8 ELCOT Kancheepuram IT / ITES
9 ELCOT Vilankurichi, Coimbatore IT / ITES
10 M/s. Hacciendaa Infotech and Realtors Private Ltd Sholinganallur Village, Old Mahapalipuram IT / ITES
11 Bannari Technoparks Pvt Ltd Kalapatty Village, Coimbatore Dt IT/ITES
12 Arun Excello Infrastructure Pvt Ltd Vallancheri & Potheri Villages, Kanchipuram Dt IT/ITES
13 Zillion Estates Pvt Ltd Kancheepuram IT/ITES
14 Span Venture Pvt Ltd Kurichi Village, Eachanari, Coimbatore IT / ITES
15 ETA Technopark Private Ltd Old Mahapalipuram Road, Navalur Village, Chengalpet IT/ITES
16 SIPCOT Ranipet Phase III, Vellore District Leather Sector
17 Foxconn India Developer Private Limited Santhavelore-B, Sriperumpudur Taluk, Kancheepuram Dt. IT & Electronics hardware
18 Velankanni Technology Parks Pvt ltd Podavur Village, Sriperumpudur Taluk, Kancheepuram Dt. Electronics hardware & software & ITES
19 Cognizant Technology Solutions India Pvt Ltd SIPCOT IT Park, Siruseri, Chennai IT / ITES
20 SNP Infrastructure Pvt Ltd Zamin Pallavaram Village, Tambaram Taluk, Kancheepuram Dt IT / ITES
21 ELCOT Navalpattu Village, Trichy District IT / ITES
22 Estra Park Private Limited Mount Poonamallee High Road, Aiyappanthangal IT / ITES
23 Chennai Business Park Private Limited Madhuranthagam Taluk, Kancheepuram Dt. IT / ITES
24 Rudradev Township Private Limited Solankunni Village, Maduri Dist. IT / ITES
25 ELCOT Sholinganallur II & Perumbakkam villages, Kancheepuram Dt. IT / ITES
26 ELCOT Ilandhaikulam Village, Madurai Dt. IT / ITES
27 ELCOT Vadapalanji Taluk, Madurai Dt. IT / ITES
28 ELCOT Jagir Ammapalayam Village, Salem Dt. IT / ITES
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