IT/ITeS industry has been one of the key driving forces fuelling India's economic growth. As a proportion of national gross domestic product (GDP), IT/ITeS sector's contribution has risen from 1.2 per cent in 1997-98 to an estimated 7.5 per cent in 2011-12.
Information Technology (IT) has evolved as a major contributor to India's GDP and plays a vital role in driving growth of the economy in terms of employment, export promotion, revenue generation and standards of living. The Indian IT-BPO sector is estimated to aggregate revenues of US$ 88.1 billion in 2010-2011, with the IT software and services sector (excluding hardware) accounting for US$ 76.2 billion of revenues.
The sector includes IT services, engineering design and R&D services, ITES (IT-enabled services) or BPO and hardware.
As per NASSCOM estimates, IT/ITeS sector (excluding hardware) revenues are estimated at US$ 87.6 billion in FY 2011-12. The IT/ITeS industry is expected to grow by 19 per cent during FY 2012-13.
In 2011, the IT and ITeS industry had the market size of US$ 76 bililon, according to an industry report from NASSCOM and Aranca Research. Additionally, the market size of the industry is expected to rise to US$ 225 billion by 2020 considering India's competitive position, growing demand for exports, Government policy support, and increasing global footprint.
In segments of the IT & ITeS sector, IT services accounted for the largest share of the overall market size, with revenues of US$ 46 billion during FY2011, BPO had the market size of US$ 17.3 billion, engineering design and product development accounted for US$ 12.9 billion, and hardware had the lowest size of US$ 11.8 billion in FY2011. In FY2011, total exports from the IT sector stood at US$ 59 billion and the industry grew at a CAGR of 16.4 per cent during the five-year period of FY2007-2011 despite the global economic recession in 2008 and 2009. Exports from the IT sector were the major contributor to the overall exports and accounted for over 57 per cent of the total exports during FY2011. According to a study by management advisory firm Zinnov, adoption of IT services in the Indian SME segment is growing at 15 per cent and is expected to reach US$ 15 billion by 2015.