The size of indian IT is about US$70 billion from overseas operations which accounts for 80-90% of the whole industry. So a simple grossing up will give you an amount of about $81.4 billion (say on 85%) for the size of the whole indian IT.
Revenue of Huawei in 2011 per the above report is RMB 204 bln yuan or US$32.36 bln
Revenue of Huawei, just ONE Chinese IT Company, despite of a shrinkage in sales and income performance as affected by the global downturn, can generate a size equivalent to 32/81, about 40%, of the whole indian IT!
One implication of being an IT ODM company is its impact on the country's economy is pervasive throughout the whole supply chain whereas human intensive companies like those in indian IT, the impact on indian's supply chain is far limited, and worse still, a proportion of its operations is situated overseas which can only provide opportunites to indians holding temp working visas at lower costs (than the equivalence of non-visa status employees) so as to remain competitive (bidder @ lowest price) !
Incorrect analysis.
In services industries, there is no raw material purchase.
Total Revenue (service industries) = Company profits + Wages to Employees.
Total Revenue (manufacturing industries) = Company profits + Wages to Employees + Cost of Raw Materials
RIL Total revenues = USD 58 Billion -> Doesn't mean Reliance alone is almost as big as all IT services companies in India, combined.
Reliance buys crude oil for $ 50 Billion and sells Petroleum products for $ 58 Billion (as an illustration).
Reliance profits = $ 4 Billion
Wages to Reliance employess = $ 4 Billion
So, the real value added by Reliance in only $ 8 Billion (and not $ 58 Billion).
Infosys Revenue = $ 7 Billion, of which profilts = $ 1.7 Billion and wages cost = $5.3 Billion
The real value added by Infosys = $ 7 Billion (comparable to Reliance)
It is foolish to think that Reliance is 8 or 9 times Infosys, just because it's Total Revenues are $ 58 Billion.
Unless Huawei produces everything from "mining silicon" to "foundry" to "polythene used to package", Total Revenue is not equal to value added.
As another illustration, if China imports $ 1200 Billion of electronics components from Japan, South Korea and Taiwan and sells assembled laptops and iPhones to US and EU for $ 1300 Billion .. the value add from China is only $ 100 Billion.
If IT services companies import no "components" from South Korea, Taiwan or Japan .. but simply sell "Employee Services" for $ 70 Billion .. the value add is $ 70 Billion.
Another example: If Bao Steel were to mine 100 million tonnes of iron-ore and 200 million tonnes of coal from "chinese mines", produce steel ... and sell the entire output for a Total Revenue= $ 200 Billion ... then the total value add will $ 200 Billion. The key is that they produce "everything" in house. Only then, Total Revenue = value added.
So, Huawei value add cannot be taken as Total Revenue of $ 32.36 billion, unless it runs a "mine to packaging material" production. Only it's profits + Employees wages is the total value add.
