IT & ITes
India had 55 per cent share of the US$ 185-190 billion global sourcing business in FY18.

Indian IT, ITes & BPM Industry Analysis

Latest update: September, 2018

  • The global digital transformation market size is expected to rise at a CAGR of 18.56 per cent from US$ 1.2 trillion in 2017 to US$ 2 trillion in 2020.
  • India’s IT industry is increasingly focusing on digital opportunities as digital is poised to be a major segment in the next few years. It is also currently the fastest growing segment, growing over 30 per cent annually.
  • Export revenue from digital segment already forms about 20 per cent of the industry’s total export revenue as exports have grown at a CAGR of 50.76 per cent to an estimated US$ 25 billion in FY18.
  • Revenue from digital is expected to comprise 38 per cent of the forecasted US$ 350 billion industry revenue by 2025.^
Growth

Notes: ^According to Nasscom, E - Estimated
Source: Nasscom, IDC, Media Sources

  • Total PE/VC investments in FY17 were observed to be US$ 7 billion, which increased at a CAGR of 27.25 per cent from US$ 0.8 billion in FY08
  • Total number of PE/VC investment deals reached 322 in FY17. During April-December 2017, 245 PE/VC deals were undertaken in the IT-BPM sector.
Growth

Notes: CAGR – Compound Annual Growth Rate, FY18* - Up to December 2017
Source: Venture Intelligence, Nasscom, PWC Moneytree report

Last Updated: September, 2018

India is the world's largest sourcing destination, accounting for approximately 55 per cent of the US$ 185-190 billion market in 2017-18. The country's cost competitiveness in providing Information Technology (IT) services, which is approximately 3-4 times cheaper than the US, continues to be its Unique Selling Proposition (USP) in the global sourcing market.

The sector ranks second in India’s total Foreign Direct Investment (FDI) share and has received US$ 30.82 billion of FDI inflows between April 2000 and March 2018.

India’s highly qualified talent pool of technical graduates is one of the largest in the world and has a low-cost advantage by being 5-6 times inexpensive than US.

Revenue of India’s IT industry reached US$ 167 billion and exports stood at US$ 126 billion in 2017-18. The Business Process Outsourcing (BPO) segment accounted for 21.20 per cent of the total IT exports during FY18. India’s IT-BPM sector is expected to expand to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion out of the total revenue. Export revenue from digital segment forms about 20 per cent of the industry’s total export revenue. Total export revenue of the industry is expected to grow 7-9 per cent year-on-year to US$ 135-137 billion in FY19.

The Government of India has extended tax holidays to the IT sector for software technology parks of India (STPI) and Special Economic Zones (SEZs). Further, the country is providing procedural ease and single window clearance for setting up facilities. Under Union Budget 2018-19, the government has announced setting up of a national level programme that will enable efforts in Artificial Intelligence (AI) and will help in leveraging AI technology for development works in the country.

Indian IT & ITes Industry Report (September, 2018)

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Indian IT & ITes Industry Report (July, 2018)

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