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India’s IT industry contributed around 7.7% to the country’s GDP and is expected to contribute 10% to India’s GDP by 2025.

Indian IT & BPM Industry Analysis

    Last updated on Oct, 11 2021

India is the world's largest sourcing destination with largest qualified talent pool of technical graduates in the world. According to National Association of Software and Service Companies (Nasscom), the Indian IT industry’s revenue is estimated to reach US$ 194 billion in FY21, an increase of 2.3% YoY. The sector is the largest employer within the private sector. According to Gartner estimates, IT spending in India is estimated to reach US$ 93 billion in 2021 (7.3% YoY growth) and further increase to US$ 98.5 billion in 2022.

This push towards cloud services has boosted hyper-scale data centre investments, with global investments estimated to exceed ~US$ 200 billion annually by 2025. India is expected to gain a significant share in the global market, with the country's investment expected to hit ~US$ 5 billion annually by 2025.

According to the research findings commissioned by Amazon Web Services (AWS), Indian enterprises and public sector organisations (that migrated from on-premises data centres to cloud infrastructure) can expect to lower their energy and carbon footprint by over 80%. 

In Budget 2021, the government has allocated Rs. 53,108 crore (US$ 7.31 billion) to the IT and telecom sector.

The IT industry accounted for 8% of India’s GDP in 2020. Exports from the Indian IT industry are expected to increase by 1.9% to reach US$ 150 billion in FY21. In 2020, the IT industry recorded 138,000 new hires. According to STPI (Software Technology Park of India), the software exports by its registered units increased by 7% YoY to reach Rs. 5 lakh crore (US$ 67.40 billion) in FY21 from Rs. 4.66 lakh crore (US$ 62.82 billion) in FY20, driven by rapid digitization and the IT industry's timely transition to remote working environments that helped to keep up the industry’s growth amid coronavirus pandemic.

The IT & BPM industry’s revenue is estimated at ~US$ 194 billion in FY21, an increase of 2.3% YoY. The domestic revenue of the IT industry is estimated at US$ 45 billion and export revenue is estimated at US$ 150 billion in FY21.

Artificial Intelligence (AI) is expected to boost India's annual growth rate by 1.3% by 2035, as per NITI Aayog. A substantial increase in AI by Indian firms can result in a 2.5% increase in India’s Gross Domestic Product (GDP) in the immediate term. In September 2020, NASSCOM FutureSkills and Microsoft collaborated to launch a nationwide AI skilling initiative to train one million students in AI technology by 2021.

The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 71.05 billion between April 2000 and March 2021. The sector ranked 2nd in FDI inflows as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

The computer software and hardware sector in India attracted cumulative FDI inflows worth US$ 71.05 billion between April 2000 and March 2021, according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

In 2020, PE investments in the sector stood at US$ 7.5 billion. IT & BPM led the venture capital (VC) investment with 380 deals in in 2020, contributing 71% to the total deal count. The COVID-19 pandemic has accelerated the demand for third-party data centre services in India.

The Government of India has extended tax holidays to the IT sector for Software Technology Parks of India (STPI) and Special Economic Zones (SEZs). As of February 2020, there were 421 approved SEZs across the country, with 276 of them from IT & BPM and 145 as exporting SEZs.

Indian IT & BPM Industry Report (July, 2021)
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Click to access the IT & BPM Industry Archived Report

IT & BPM India

Sector-wise breakup of export revenue FY15E
IT Sector Employment Distribution in India

 

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