Snapshot

New India: The future is virtual

India is consistently strengthening its digital capabilities by adopting deep tech technologies and focusing on deploying AI, Cybersecurity and IoT based solutions.

In FY21, the Technology industry employed over 138,000 employees to reach total direct employment of 4.47 mn, and contributed 52% to overall services exports. Out of 146 acquisitions in FY21, over 90% of them were focused on growing digital capabilities. Over 280,000 new digitally skilled employees were added in FY21. At 28-30% of industry revenue, digital revenues grew five times the rate of overall services growth.

The 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 toward developing technology solutions to enable citizen services. The government continues to focus on areas such as cybersecurity, hyper-scale computing, artificial intelligence and blockchain.

Indian TSPs are offering 1GB mobile data at $0.09 or INR 6.7 - one of the cheapest globally (as of July 2021); digital infrastructure enables ease of access to services like banking, governance and more.

India is the 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 stood at $194 bn in 2020-21. The export revenue from this industry (excluding e-commerce) has been estimated at close to US$ 150 bn in 2020-21. In terms of FDI inflow, the computer software and hardware sectors attract the second highest FDI. Between April 2000 and September 2021, it attracted over US$ 78 billion.

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 million professionals.

Investment in Software-as-a-Service has increased 170% over 2020 and is expected to reach $4.5 billion in 2021, accounting for 8% of the overall private equity and venture capital deal value in India.

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 per cent 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 $194 bn in 2020-21. The export revenue from this industry (excluding e-commerce) has been estimated at close to US$ 150 billion in 2020-21. In terms of FDI inflow, the computer software and hardware sectors attract the second highest FDI. Between April 2000 and September 2021, it attracted over US$ 78 billion. 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 million professionals. Investment in Software-as-a-Service has increased 170% over 2020 and is expected to reach $4.5 billion in 2021, accounting for 8% of the overall private equity and venture capital deal value in India.

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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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