Snapshot

New India: The future is virtual

Indian industry is consistently strengthening its digital capabilities by adopting deep tech technologies and focusing on deploying emerging technology solutions such as AI, Cybersecurity, and IoT

In FY22, the Technology industry employed over 450,000 employees to reach a total direct employment of 5 mn, and contributed 51% to overall services exports. With their primary focus as digital, the tech industry undertook over 290 M&As. Over 280,000  employees were reskilled and made digital skilled in FY22. At 30-32% of industry revenue, digital revenues grew five times the rate of overall services growth.

Government of India has taken some major initiatives to promote IT/ ITeS sector in India. Both central and state governments in India have taken steps towards developing technology solutions to digitally enable citizen services. The government plans to focus in areas such as cybersecurity, hyper-scale computing, artificial intelligence, and blockchain. 

Indian telecoms are offering 1GB mobile data at $0.086 - one of the cheapest globally. By offering affordable data to consumers, the digital infrastructure enables ease of access to services like banking, governance and more. 

Second highest number of internet subscribers in the world.

Up to 100% FDI is allowed in Data processing, Software development and Computer consultancy services; Software supply services; Business and management consultancy services, Market research services, Technical testing and Analysis services, under automatic route

For further details, please refer FDI Policy

  • %

    Share in India's GDP

  • > %

    Share in global outsourcing market

  • %

    Growth in export revenue

  • > %

    Share in Indian services export

Largest market share in global services sourcing industry

Third largest and the fastest growing hub for technology startups

India is No.1 in digital skills readiness

Industry Scenario

#1 in software services exports

The IT-BPM industry’s (excluding e-commerce) total revenue crossed the $200 bn mark to reach $227 bn in FY2022. The export revenue from this industry (excluding e-commerce) has been estimated at close to $ 178 bn in FY2022.  In terms of FDI inflow, the computer software and hardware sectors attract the second highest FDI. Between April 2000 and March 2022, it attracted over $ 85 bn. 

India secured 1st rank in “AI talent concentration”. Also, India secures 5th rank in “FTTH/Building Internet subscriptions” and “AI scientific publications”.

India is one of the most preferred destinations when it comes to setting up Global Capability Centres (GCCs). In FY21, more than 1,400+ GCCs have more than 2,300 GCC units in India, employing more than 1.38 mn professionals. 

Over 45 new data centers to come up in India by 2025.

Data centres in India attract investment of $10 bn since 2020.

Investment in Software-as-a-Service (SaaS) has increased 62.5% over 2021 and is expected to reach $6.5 bn in 2022. There are 1150+ active Indian SaaS companies; 17 of which have achieved the unicorn status.

Internet users have increased to 80 crores in 2022 from 6 crores in 2014. optical fiber in panchayats have increased from less than 100 in 2014 to 1.7 lakh panchayats in 2022.

GROWTH DRIVERS

  • Blockchain

    The Ministry of Electronics and Information Technology released the National Strategy on Blockchain to reduce frauds, speed up enforcement of contracts, and increase the transparency of transactions.

  • Remote Working

    Increased focus on remote working and cloud enablement

  • The National Optical Fibre Network (NOFN)

    1.78 lakh Gram Panchayats connected by optical fibre

  • Digital India Programme

    India is the 2nd Fastest Digitizing Economy Globally

  • Start-up revolution

    IoT, machine learning, artificial intelligence and healthcare

  • Artificial Intelligence

    AI & new-age technology to boost India's annual growth rate by 1.3% by 2035 (NITI Aayog white paper)

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GIS - based map displaying available infrastructure for setting up business operations in the state.

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FAQs

Frequently
Asked Questions

What are the steps taken by Department of Electronics and Information Technology (DeitY) to support the growth of the sector?

The steps taken are as follows:
a) Infrastructure support: The Department has set up Information Technology Investment Regions (ITIRs). These regions are supported equipped with excellent infrastructure.
b) R&D promotion: 150% of expenditure incurred on in-house R&D is also available under the Income Tax Act.
In addition to the existing scheme for funding R&D projects, the department has put in place the 2 key schemes:
i) Support International Patent Protection in Electronics & IT (SIP-EIT).
ii) Multiplier Grants Scheme (MGS).
c) Tax incentives: Over the years, the Government has been taking steps to bring down the total taxation level on electronics hardware.

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What is the overview of the IT BPM sector in India and the performance of this sector in recent times?

The IT-BPM industry’s (excluding e-commerce) total revenue stood at $227 bn in FY2022. The export revenue from this industry (excluding e-commerce) has been estimated at close to $ 178 bn in FY2022.  In terms of FDI inflow, the computer software and hardware sectors attract the second highest FDI. Between April 2000 and March 2022, it attracted over $ 85.5 bn. India is one of the most preferred destinations when it comes to setting up Global Capability Centres (GCCs). At present, more than 1,400 GCCs have more than 2,300 GCC units in India, employing more than 1.38 mn professionals. Investment in Software-as-a-Service (SaaS) has increased 62.5% over 2021 and is expected to reach $6.5 bn in 2022.  Total active Indian SaaS companies became 1150+; 17 of which have achieved the unicorn status.

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Which IT Enabled Services are considered to be part of BPO operations?

As per Central Board of Direct Taxes (CBDT) notification No. 890E dated 26 September 2000, the list of eligible IT enabled services under BPO operations considered in IBPS are as under:
i) Back office operations.
ii) Call centres.
iii) Content Development or Animation.
iv) Data Processing.
vi) Geographic information System Services.
vii) Human Resource Services.
viii) Insurance Claim processing.
ix) Legal Databases.
x) Medical Transcription.
xi) Payroll.
xii) Remote Maintenance.
xiii) Revenue Accounting.
xiv) Support Centres.
xv) Website services.

As per NASSCOM, BPO includes following processes that may be IT-enabled, do not necessitate on-shore presence and are hence, offshore-able:
1) Customer Interaction & Support (CIS)- CIS includes all forms of IT-enabled customer contact, inbound or outbound, voice or non-voice based support used to provide customer services, sales and marketing, technical support and help desk services.
2) Finance & Accounting (F&A)- F&A includes activities such as general accounting, transaction management (account receivables and payables management), corporate finance (e.g. treasury and risk management, and tax management); compliance management and statutory reporting, etc.
3) Horizontal-specific BPM services- Services that are reasonably similar across industries. Horizontal BPM services include Customer Interaction and Support (CIS), Finance and Accounting (F&A) and other related processing services, Knowledge Services, Human Resource Management (HRM), Procurement BPM, etc.
4) Human Resources Processing- HR processing services includes services that support the core HR activities plus talent management activities and associated business processes such as benefits, payroll and talent management.

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What are the Export Promotion Schemes offered by the Ministry of Technology and Information Technology (MeITY)?

The two major export promotion schemes launched under the Ministry of Electronics and Information Technology are:
 

1) Software Technology Parks (STPs): STP of India was set up as an autonomous body in 1991.
 Some of the benefits offered are:
 a) Customs duty exemption
 b) Accelerated depreciation
 c) 100% FDI permitted through automatic route.


 2) Special Economic Zone (SEZ): They were set up with an objective of providing an international competitiveness. Some of the benefits are:
 a) 100% income tax exemption on export income
 b) Duty free import. Please note that SEZ are for multiple sectors and these benefits extend to sectors other than IT BPM 

For more information, click here.

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How local entrepreneurs can participate in IBPS?

An entrepreneur can form a Consortium with a Company registered anywhere under Companies Act 1956/2013 which is able to fulfil the other eligibility criteria(s). The eligible Indian Company must have at least 26 % equity shareholder in the Consortium and commit to maintain minimum equity shareholding (26%) for at least three years.

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