The smart card market in India is associated primarily with a few major applications. The most prominent among these applications is the Subscriber Identity Module (SIM) in the cellular industry. Most of the country has a GSM mobile network (Global System for Mobile), which requires the SIM. This segment has been growing rapidly and offers tremendous potential to the smart card industry in India. It is estimated that mobile connections in India will grow at a 45.7% compound annual growth rate through 2009. Service revenue in India will grow at a 35.6% compound annual growth rate through 2009.

The rural market, which has not been tapped till now, has huge potential. At the beginning of November 2004, the total telephony penetration in rural areas was around 1.7% as against 19.4% in urban India. The decision to increase investments to 74% in the telecom sector creates a basis to expand telecom investments in rural and semi-urban areas.