IBM sees strong growth in India as IT spend grows

By Sumeet Chatterjee

BANGALORE (Reuters) - IBM Corp plans to boost growth in India as part of its strategy to enhance focus on emerging markets and as local companies spend more on technology to cut costs and improve efficiency, an official said on Tuesday.

IBM's revenue in India grew 43 percent to about $1 billion in 2007, and Asia's third-largest economy is the fastest growing market for IBM worldwide.

The company sees strong business potential as firms in insurance, retail, healthcare, energy and utility outsource technology services, said Sandip Patel, managing partner of IBM's global business services in India and South Asia.

"One of the things which we have done very proactively ... is very aggressively look at emerging markets around the world so that we won't necessarily be ... dependent on any given market around the world," Patel told Reuters in an interview.

"India, in particular, I think has been one of the key growth markets, an emerging market that we started with."

IBM has more than 73,000 employees in India -- up from about 3,000 in 2002 -- making it the world's largest computer services company's second-largest operation after the United States.

IBM signed a 10-year, $750 million deal in 2004 with top mobile services firm Bharti Airtel to manage its IT infrastructure. The deal's value is now estimated to have gone up to about $1.5 billion due to robust growth in Bharti's subscriber and revenue.

In March last year, Indian real estate developer DLF signed a $29 million, 10-year contract with IBM to transform and manage its IT infrastructure. In June, IBM won a $45 million services agreement from India's Central Board of Direct Taxes.