FOCUS ON INDIA: Information Technology Sector
The Indian IT industry has played a key role in putting India on the global map. Though the fast growth is slowing down due to automation, machine learning, growing competition, global trade dynamics et al however the contribution of IT/ITES sector remains to be around 8% to Indian GDP.
The Indian IT/ITES (Information Technology / Information Technology Enables services) industry earned revenue of over €131 billion during FY17. IT industry in India consists of two major components viz IT services and BPO (business process outsourcing). India is the world's largest sourcing destination, accounting for approximately 50% of the US$ 185-190 billion market in 2017-18. The Indian IT and BPO industry, grew by 7.7% in FY17. The Indian IT industry has played a key role in putting India on the global map. Though the fast growth is slowing down due to automation, machine learning, growing competition, global trade dynamics et al however the contribution of IT/ITES sector remains to be around 8% to Indian GDP.
India has had a profound effect on the global software industry. From modest beginnings in low-end activities like code-testing and bug fixing to new ideas and technologies, the IT industry in India has evolved into a technology powerhouse to be reckoned with and India is now emerging as an innovation and research hub. Indian companies have built a strong reputation for high standards of service quality and information security. The industry has played a significant role in transforming India’s image from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class technology solutions and business services.
Exports are significant for the sector accounting for over 75% of the total revenue, and digital is the fastest growing segment within the sector. Refer the table below for the breakup around total revenue:
- India has roughly 60-70 % cost saving over source countries.
- Total exports from the IT-BPM sector (including hardware) were estimated to have been €108 billion during FY18; exports rose at a CAGR of 12.26 % during FY09–18
- North America (60%) is the main exports destination followed by UK (18%), Europe (12%), APAC (7%) and rest of the world (>2%)
- Over 85 % of the total Indian IT-BPO exports is across four sectors viz. BFSI, telecom, manufacturing and retail.
- Indian IT & ITeS companies have set up over 1,000 global delivery centers in about 80 countries across the world.
- As of March, 2018 there were over 1140 GICs (Global In-house Centers) operating out of India