IT & BPM Industry

India's IT & BPM Sector: Driving Economic Growth and Digital Empowerment

The IT & BPM sector in India has emerged as a linchpin for the nation's economic development, significantly impacting both GDP and the overall welfare of the populace. Accounting for a substantial 7.4% of India's GDP in FY22, this sector is poised for even more remarkable growth, with a projected contribution of 10% to the GDP by 2025. This growth is not just a numerical increase; it signifies a fundamental shift in India's technological landscape.

India stands out on the global stage for having one of the largest Internet user bases and offering some of the most affordable Internet rates. An impressive 76 crore citizens now have access to the Internet, underscoring the widespread digital reach. The emphasis is now on creating significant economic value and empowering citizens, enabled by a robust digital infrastructure and improved digital access through initiatives like the Digital India Programme.

This transformation is a result of a dynamic mix of government initiatives, commercial innovation, strategic investments, and the rapid integration of new digital applications across various sectors. The effects of this digital revolution are tangible, permeating diverse activities and forms of work, positively impacting the daily lives of citizens. India's ascent in the Global Innovation Index (GII), improving six places to the 40th position in the 2022 edition, affirms the nation's commitment to innovation and its growing prominence in the global technological landscape.

In essence, India's IT & BPM sector isn't merely shaping the economy; it's propelling a societal shift, ushering in an era of digital empowerment and positioning India as a front-runner in technological advancement. The convergence of technology, visionary government policies, entrepreneurial innovation, and substantial investments is steering this sector towards a transformative trajectory, promising a bright digital future for the nation.

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Our commitment to understanding your organization, combined with our industry expertise, empowers us to deliver solutions that not only meet but exceed your expectations. With Cyberensic Global, you can rest assured that your organization's cybersecurity and information security needs are in capable hands.

Market Size

The Indian IT industry is experiencing an impressive surge, making substantial contributions to the country's economy and job market.

According to the National Association of Software and Service Companies (Nasscom), the revenue of the Indian IT industry reached an impressive US$ 227 billion in FY22, reflecting a remarkable YoY growth of 15.5%. Projections indicate a further increase, estimated to have touched US$ 245 billion in FY23, affirming the industry's robust growth trajectory.

Gartner estimates suggest a notable increase in IT spending in India, expected to reach US$ 101.8 billion in 2022, showcasing a clear upward trend from the estimated US$ 81.89 billion in 2021. This highlights the growing investments in technology and digitalization within the nation.

The Indian software product industry is poised for significant growth, with an anticipated reach of US$ 100 billion by 2025. Indian companies are strategically investing internationally, aiming to expand their global footprint and enhance global delivery centers, signaling a global outlook for the industry.

The data annotation market in India is witnessing substantial growth, fueled by accelerated domestic demand for AI. From standing at US$ 250 million in FY20, it is expected to soar to an impressive US$ 7 billion by 2030, showcasing a surge in AI-related activities and technologies.

India's IT export revenue witnessed a notable rise, increasing by 11.4% in constant currency terms to US$ 194 billion in FY23. In FY22, exports from the Indian IT industry stood at US$ 178 billion. The industry also significantly contributed to job creation, adding 2.9 lakh new jobs, thereby taking the industry’s workforce tally to 5.4 million people in FY23.

Export of IT services remains a major contributor, accounting for over 51% of total IT export, encompassing hardware. Additionally, BPM and engineering, R&D (ER&D), and software products export each accounted for 20.78% to the total IT exports during FY21. The ER&D market is anticipated to grow to a substantial US$ 42 billion by 2022, indicating diversification and growth opportunities within the sector.

India's IT industry is not only showcasing rapid growth in revenue and exports but is also generating substantial employment opportunities, contributing significantly to the nation's economic advancement and positioning India as a global IT hub. The consistent growth trends indicate a promising future for the industry, marked by advancements in technology, global expansions, and a skilled talent pool.

Advantage

Growing Demand:

Abundant Job Opportunities: The Indian IT industry is a beacon of employment opportunities, with major players like TCS, Wipro, and Infosys expected to create 1.05 lakh job openings in FY22. This surge in job opportunities underscores the growing demand for talent and skill in the sector.
Expanding Market: India's IT and business services market are on a trajectory of expansion, projected to reach an impressive US$ 19.93 billion by 2025. This forecasted growth reflects the increasing demand for IT services both domestically and internationally.
Rising IT Spending: The demand for IT services is further fueled by increasing IT spending in India, forecasted to reach US$ 101.8 billion in 2022, as estimated by Gartner. This spending surge emphasizes the need for robust IT infrastructure and services.

Global Footprint:

Extensive Global Reach: Indian IT firms have strategically established delivery centers worldwide, amplifying their global footprint. This international presence allows for seamless service delivery and enhances India's position as a global IT services provider.
Diversified Verticals: The IT & BPM industry in India showcases diversification across various verticals, including Banking, Financial Services, and Insurance (BFSI), telecommunications, retail, and more. This diversification ensures a broader market reach and stability.
Strategic Alliances: The industry is witnessing an upsurge in strategic alliances between domestic and international players. These collaborations are aimed at delivering comprehensive IT solutions across the globe, leveraging each other's strengths and expertise.

Competitive Advantage:

Cloud Expertise: India holds a competitive edge globally, ranking third with 608,000 cloud experts across diverse verticals. This expertise positions India as a hub for cloud-based solutions, an essential aspect of modern IT infrastructure.
FDI Attraction: The computer software and hardware sector in India has attracted significant foreign direct investment (FDI) inflows, accumulating to US$ 94.92 billion between April 2000 and March 2023. This investment affirms India's appeal and competitiveness in the IT sector.

Policy Support:

Government Allocations: The Indian government showcases its commitment by allocating substantial funds to the IT and telecom sector. In the Union Budget 2023-24, a notable Rs. 97,579.05 crore (US$ 11.8 billion) was earmarked for this sector, emphasizing its strategic importance.
Export-Oriented Scheme: The government's introduction of the STP Scheme, a 100% export-oriented initiative for computer software development and export of professional services, exemplifies its support for fostering a thriving IT export ecosystem.

India's IT industry is not only meeting growing global demand but is also continuously enhancing its competitive advantage through strategic measures and robust policy support. The sector's ability to adapt, diversify, and innovate reinforces India's position as a significant player in the international IT landscape.

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