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IT & ITeS Industry in India

August, 2013


The IT&ITeS industry in India has today become a growth engine for the economy, contributing substantially to increases in the GDP, urban employment and exports, to achieve the vision of a powerful and resilient India.

Indian firms, across all other sectors, largely depend on the IT & ITeS service providers to make their business processes efficient and streamlined. Indian manufacturing sector has the highest IT spending followed by automotive, chemicals and consumer products industries.

Nasscom expects the IT services sector in India to grow by 13-14 per cent in 2013-14 and to touch US$ 225 billion by 2020.

Market Size

India’s total IT industry’s (including hardware) share in the global market stands at 7 per cent; in the IT segment the share is 4 per cent while in the ITeS space the share is 2 per cent. The industry is dominated by large integrated players consisting of both Indian and international service providers. During the year, the share of Indian providers went up to 65 per cent-70 per cent due to the emerging trend of monetisation of captives.

India's IT and BPO sector exports are expected to grow by 12-14 per cent in FY14 to touch US$ 84 billion - US$ 87 billion, according to Nasscom.

IT spending in India is projected to reach US$ 71.5 billion in 2013, an increase of 7.7 per cent as compared to US$ 66.4 billion projected for 2012, as per a report by Gartner.

The enterprise software market in India is expected to reach US$ 3.92 billion in 2013, registering a growth of 13.9 per cent over 2012 revenue of US$ 3.45 billion, according to Gartner.


Indian IT's core competencies and strengths have placed it on the international canvas, attracting investments from major countries.

Between April 2000 and June 2013, the computer software and hardware sector attracted cumulative foreign direct investment (FDI) of Rs 53,757.60 crore (US$ 7.97 billion), according to data released by the Department of Industrial Policy and Promotion (DIPP).

More recently, online retailing, cloud computing and e-commerce are the major driving forces behind the rapidly increasing growth in the IT industry. Online shopping has increased with the emergence of internet retailing and e-commerce.

Some of the major investments in Indian IT and ITeS sector:

  • Baring Private Equity Partners Asia plans to buy IT services firm Hexaware Technologies in a deal estimated at about US$ 400 million
  • Cognizant has been selected by the Saudi Electricity Company (SEC) to develop a comprehensive billing and revenue management solution based on SAP utilities enterprise software to meet the functional, technical, and operational requirements of SEC's rapid growth
  • Prisma Global has acquired majority stake in German technology venture Prisma Gmbh for about Rs 27 crore (US$ 4.00 million). The company will now own the Intellectual Property (IP) of technologies developed by the German firm
  • Wipro Ltd have secured a large IT outsourcing contract worth US$ 500 million from the US-based financial services company Citigroup. Wipro will be responsible for application development and maintenance, as well as providing infrastructure management services, for Citi's global operations
  • Tech Mahindra has signed a five-year agreement with UBS Fund Services (Luxembourg) (UBS FSL) for its new platform, Tech Mahindra Managed Data Services (MDS), designed to support asset managers, wealth managers, investment banks, custodians and administrators. The company’s Brazilian subsidiary Complex IT has also signed two deals to deliver enterprise solutions for oil and gas, and banking sector