American IT spending is expected to grow by 4 per cent in 2004 with information technology outsourcing, largely beneficial to India, expected to shoot up by 7 per cent, IT research firm Forrester said on Friday.

Citing the firm's latest study of 850 United States firms with a revenue of more than $1 billion, Forrester Research chief executive officer George Colony said growth in IT spending would be witnessed in networking equipment, server hardware, application software services and development, besides IT outsourcing.

Colony, who addressed IT clients of the firm in Bangalore, however, did not reveal the total IT budget in US.

He asked the Indian IT firms to brand themselves in the American market. Nearly 65 per cent of the companies who had outsourced software work to India would continue to do so during 2004, he said.

However, of the firms which had not experimented with outsourcing from India, he said, only 9 per cent were willing, he said.

Indian firms, Colony said, should look at 'sub-verticals' of the 'big verticals' and provide solutions that add value to customers.

Stating that the anti-outsourcing outcry in the US would not become an election issue, he said Indian companies and software associations should lobby and directly interact with US lawmakers, companies and people to reinforce that outsourcing IT work to India actually benefits the US.