The IT industry should focus on domestic market as well as diversify into newer markets overseas to control the decline in export revenues and achieve USD 400 billion growth target, Department of Electronics and IT (DeitY) Secretary J Satyanarayana said on Wednesday.

"IT industry should focus on domestic market and diversify in newer and emerging markets for exports to tackle declining export revenues and achieve the USD 400 billion growth target," he said while addressing the BangaloreIT.biz 2012 here.

He said though India has done well in IT exports, it has to do a lot in domestic market which has a huge potential.

For the domestic sector, the industry "should focus on inclusive growth in sectors such as healthcare, education and e-governance services," he said.

"The domestic IT market is worth USD 20 billion, which is 10 per cent compared to 80-90 per cent in developed economies," he said.

In India, the penetration of Information Communication Technology (ICT) is extremely low which means it presents a huge opportunity, Satyanarayana said, adding that India IT industry has potential to grow upto 400 billion.

He said the investments have to be driven to tier-2 cities. The Centre is investing Rs 20,000 crore on laying optical fibre cable to connect 250,000 gram panchayats by 2013, he added.

"Now, it is growing at 8-10 per cent and to achieve this, the industry has to grow at 14-15 per cent pro rata in eight years," he said.