Commerce Dashboard
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.

IT & BPM Industry in India

    Last updated on Sep, 9 2021

Indian IT & BPM Industry Report  (Size: 654.59 KB ) (July, 2021)


The global sourcing market in India continues to grow at a higher pace compared to the IT-BPM industry. India is the leading sourcing destination across the world, accounting for approximately 55% market share of the US$ 200-250 billion global services sourcing business in 2019-20.

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.

Market Size

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. 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. The BPM sector in India currently employs >1.4 million people, while IT and BPM together have >4.5 million workers, as of FY21.

Indian software product industry is expected to reach US$ 100 billion by 2025. Indian companies are focusing to invest internationally to expand global footprint and enhance their global delivery centres. In line with this, in February 2021, Tata Consultancy Services announced to recruit ~1,500 technology employees across the UK over the next year. The development would build capabilities for TCS to deliver efficiently to the UK customers.

The data annotation market in India stood at ~ US$ 250 million in FY20, of which the US market contributed ~ 60% to the overall value. The market is expected to reach ~ US$ 7 billion by 2030 due to accelerated domestic demand for AI.

Investments/ Developments

Indian IT's core competencies and strengths have attracted significant investment from major countries. 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). In FY21, computer software and hardware topped FDI investments, accounting for 44% share of the total FDI inflows of US$ 81.72 billion.

Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra are diversifying their offerings and showcasing leading ideas in blockchain and artificial intelligence to clients using innovation hubs and research and development centres to create differentiated offerings.

Some of the major developments in the Indian IT and ITeS sector are as follows:

  • In July 2021, TCS expanded its strategic partnership with Royal London, the largest mutual life insurance, pensions and investment company in the UK, to help the latter transform its pension platform estate and deliver market-leading services to members and customers.
  • In July 2021, Tata Technologies partnered with Stratasys, a 3D printing technology company, to provide advanced additive manufacturing technologies to the Indian manufacturing ecosystem.
  • In July 2021, Tech Mahindra Foundation and Wipro GE Healthcare have joined forced to offer skilling and upskilling courses to students and healthcare technicians.
  • In July 2021, HCL announced a multi-year agreement with Fiskars Group, consisting of a family of lifestyle brands including Fiskars, Gerber, Iittala, Royal Copenhagen, Waterford and Wedgwood for digital transformation.
  • In July 2021, TCS launched Jile 5.0, a key release of its Enterprise Agile, on-the-cloud services, planning and delivery tool that enables enterprises to meet the large-scale development needs of multiple distributed teams.
  • In June 2021, Federal Bank expanded its strategic collaboration with Oracle and Infosys to offer an enhanced customer experience through Oracle CX (customer experience) platform.
  • In June 2021, Infosys announced a collaboration with Archrock, Inc., a leading provider of natural gas compression services in the US, to integrate digital technologies and mobile tools for its field service technicians.
  • In June 2021, Tata Consultancy Services (TCS) extended its 17-year partnership with the UK’s Virgin Atlantic to help the latter embark on a new phase of ‘recovery and growth’. TCS will take exclusive responsibility of the airline’s end-to-end operational management and digital transformation.
  • In June 2021, Wipro announced that it has joined the World Economic Forum’s ‘Partnership for New Work Standards’ initiative to establish a healthy, resilient and equitable future of work.
  • In June 2021, the International Chess Federation (FIDE) announced a new partnership with Tech Mahindra Ltd. to focus on creating together the Global Chess League, a project first proposed by Tech Mahindra Ltd.

Government Initiatives

Some of the major initiatives taken by the Government to promote IT and ITeS sector in India are as follows:

  • On July 2, 2021, the Ministry of Heavy Industries and Public Enterprises launched six technology innovation platforms to develop technologies for globally competitive manufacturing in India. The six technology platforms have been developed by IIT Madras, Central Manufacturing Technology Institute (CMTI), International Centre for Automotive Technology (iCAT), Automotive Research Association of India (ARAI), BHEL and HMT in association with IIScBanglore.
  • In July 2021, the Arun Jaitley National Institute of Financial Management (AJNIFM) and Microsoft have formed a strategic partnership to build AI and emerging technologies Centre of Excellence.
  • In June 2021, the Indian government announced plans to launch Biotech-PRIDE (Promotion of Research and Innovation through Data Exchange) to deposit biological data in the country’s national repository.
  • In May 2021, MyGov, the citizen engagement platform of the Government of India, in partnership with the Department of Higher Education launched an innovation challenge to create an Indian language learning app.
  • In order to establish an enabling environment for the IT industry, in April 2021, the Development of Advanced Computing (C-DAC) launched three innovatice technologies Automatic Parallelizing Compiler (CAPC), Cyber Security Operation Centre (CSoC) as a Service, and C-DAC’s indigenous High-performance Computing software solutions—Parallel Development Environment (ParaDE).
  • In Budget 2021, the government has allocated Rs. 53,108 crore (US$ 7.31 billion) to the IT and telecom sector.
  • Department of Telecom, Government of India and Ministry of Communications, Government of Japan signed a MoU to enhance cooperation in areas of 5G technologies, telecom security and submarine optical fibre cable system.
  • In 2020, the government released “Simplified Other Service Provider” (OSP) guidelines to improve the ease of doing business in the IT Industry, Business Process Outsourcing (BPO) and IT-enabled Services.

Road Ahead

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50 55 billion of the total revenue.

Note: Conversion rate used for July 2021 is Rs. 1 = US$ 0.01355

Notes: * - As per Gartner, ^ - Artificial Intelligence

References: Media Reports, Press Information Bureau (PIB), Department for Promotion of Industry and Internal Trade (DPIIT), Department of Information and Technology, Union Budget 2021-22

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

IT & BPM India

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



Brand India Pharma


India has the fastest internet traffic growth globally and is expected to have 348 million users by 2017, up from 138 million in 2012.

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

Agri Export Policy - Towards smoother trade, wider global presence


+ More Publications >

IBEF Publication


Azadi ka Amrit Mahotsav
IBEF, Knowledge Centre

The Government of India launched 'Azadi Ka Amrit Mahotsav&...

Vehicle Scrappage Policy
IBEF, Knowledge Centre

The Vehicle Scrappage Policy, launched on August 13, 2021, is a government-funded programme to ...

Indian pharma industry to touch US$ 130 billion by 2030
IBEF, Knowledge Centre

Evolution of the Indian pharma industry began in the 20th...

Expectations with New Foreign Trade Policy 2021-26
IBEF, Knowledge Centre

A foreign trade policy provides a set of guidelines that help a country achieve its domestic pr...

Indian Defence Land Policy - Reforms and the Road Ahead
IBEF, Knowledge Centre

India has approved a new defence land policy -almost after 250...

New Educational Schemes - One Year Completion of NEP, The Road Ahead
IBEF, Knowledge Centre

In July 2020, the Indian government launched the National ...

Case Studies More


Join now. Enjoy FREE subscriptions downloads, updates and more.


Already a member?
Login / Retrieve Password