India’s IT and ITeS sector remains a global growth driver, fostering innovation, jobs, and exports. As its digital economy rapidly expands, the country remains a top outsourcing destination and is emerging as a global centre for software products, SaaS, cloud computing, and IT-enabled services.
Several Indian states are leading this transformation by providing world-class infrastructure, strong talent pools, and investor-friendly policies. Strategic government initiatives, combined with robust state-level IT and ITeS policies, have established ecosystems that attract global corporations, startups, and venture capital alike.
This listicle highlights six states driving the next wave of IT and ITeS growth, offering insights into their strengths, key projects, and government incentives for IT ITeS India, aimed at promoting sustainable, long-term investment.
1. Karnataka: India’s IT exports powerhouse
Karnataka is the leader in India’s IT and ITeS sector, contributing over 40% of the nation’s IT exports in FY2023, crossing the ₹3 lakh crore mark.[1] Bengaluru, the Silicon Valley of India, hosts more than 400 multinational R&D centres and 85 chip design houses, making it a key global IT hub.[2]
The state government has fostered growth through a combination of dedicated policies – IT Policy, Engineering R&D Policy, AVGC Policy, and GCC Policy- and a push for innovation centres and skill development programmes, ensuring a steady talent pipeline. Its initiatives include support for startups, patent fee exemptions, and infrastructure incentives for global capability centres.
Growing IT Exports from Karnataka show the state’s ambitions to strengthen its position as a global IT leader and expand high-value services, software products, and innovation-driven enterprises. Karnataka aims to double its global capability centres to reach 1,000 by 2029, targeting an economic output of $50 billion.[3] Its skilled workforce, vibrant ecosystem, and investor-friendly policies make the state an ideal destination for investing in India’s IT and ITeS sector.
2. Telangana: Rapid IT and ITeS growth
Telangana, led by Hyderabad, has become one of India’s fastest-growing IT and ITeS hubs - hosting major global corporations, technology parks, and innovation centres. The sector has been a game-changer for Telangana’s IT ITeS growth, investment and employment generation.
In FY2024, Telangana achieved notable IT exports, amounting to ₹2.68 trillion ($32.23 billion), supported by state policies encouraging software development, IT-enabled services, and fintech.[4] The Telangana IT and ITeS Policy provides incentives, such as capital subsidies, plug-and-play infrastructure, and skill development programmes, to encourage domestic and international companies to expand their operations in the state.
Key projects include Hyderabad’s HITEC City, Genome Valley, and the growing cyber and AI hubs. With a strong talent pool, modern infrastructure, and investor-friendly policies, Telangana offers an attractive environment for sustainable IT and ITeS investments.
3. Uttar Pradesh: India’s emerging IT corridor
Uttar Pradesh is rapidly developing as a key IT and ITeS hub, thanks to its strategic position in the Delhi-NCR region and the growth of dedicated IT corridors. Cities like Noida, Greater Noida, and Lucknow are experiencing strong growth in software services, IT-enabled services, and tech start-ups.
The Uttar Pradesh IT Corridor Policy provides lucrative incentives, including land allotments, tax exemptions, and infrastructure support to attract both domestic and global investors. The state is also ranked second in terms of ease of doing business.[5] Key IT hubs such as Noida’s Sector 62 and Greater Noida’s knowledge parks are home to numerous global IT firms and BPO centres. The UP GCC Policy, launched in 2024, incentivises investments in GCC setups in the state. The policy offers attractive capital and operational expense subsidies, promoting investments beyond Noida and Ghaziabad by providing substantial incentives in other districts, targeting balanced regional growth.
With its extensive talent pool, modern infrastructure, and supportive government policies, Uttar Pradesh is emerging as a prime destination for investment in the IT and ITeS sectors seeking access to India’s digital economy.
4. Tamil Nadu: SaaS capital of India
Tamil Nadu, Home to India's SaaS Capital, has emerged as a hub for software product companies and SaaS startups, led by its capital city, Chennai. The state boasts a skilled workforce, well-developed IT parks, and robust R&D capabilities, drawing both international and local tech investors. It also recorded a 53% increase in electronic exports in 2024–25, reaching $14.65 billion, up from $9.56 billion in 2023–24.[6]
Key IT infrastructure includes Tidel Park, SIPCOT IT Parks, and emerging innovation centres that promote software development, cloud services, and enterprise solutions. The state government encourages growth through targeted IT policies, incubation programmes, and incentives such as electricity duty waivers and rental subsidies for IT firms.
With a mature talent ecosystem, robust policy framework, and thriving tech community, Tamil Nadu offers investors a strategic gateway to India’s software product and SaaS markets, supporting long-term IT and ITeS growth.
5. Kerala: Technopark expansion and digital innovation
Kerala is positioning itself as a key IT and ITeS destination, led by Technopark in Thiruvananthapuram — one of India’s largest IT parks. The state is witnessing rapid growth in software services, IT-enabled services, and its startup ecosystem, supported by modern infrastructure and a skilled workforce, driven in part by the ongoing Kerala Technopark expansion.
Technopark and its satellite campuses offer plug-and-play facilities, incubation centres, and innovation labs, promoting growth in fintech, healthcare IT, and digital services. Technopark now significantly contributes to Kerala’s IT exports, which reached ₹13,255 crore in FY2023–24.[7]
With its strong focus on knowledge-based industries, talent development, and supportive policies, Kerala offers an attractive environment for investors seeking long-term opportunities in IT and ITeS.
6. Gujarat: Strategic IT and ITeS growth
Gujarat is swiftly establishing itself as a competitive hub for IT and ITeS, with cities such as Ahmedabad, Gandhinagar, and Surat leading technology-driven growth. The state is attracting both international and domestic IT companies, with a focus on software development, digital services, and enterprise solutions.
The Gujarat IT and ITeS Policy 2022–2027 offers robust incentives, including capital subsidies, infrastructure support, tax exemptions, and the facilitation of IT parks and Special Economic Zones (SEZs). The policy aims to position Gujarat among the top five IT states, increase IT exports, and generate over 100,000 direct jobs.[8] Key initiatives include developing IT clusters, innovation centres, and incubation hubs to support startups and technology-driven enterprises.
Gujarat, with its strong talent base, strategic infrastructure, and investor-friendly policies, provides a sustainable environment for IT and ITeS investment, making it an ideal destination to leverage India’s growing digital economy.
Conclusion
India’s IT and ITeS sector continues to present unmatched growth prospects, driven by a mix of skilled talent, strong infrastructure, and proactive government policies. States such as Karnataka, Telangana, Uttar Pradesh, Tamil Nadu, Kerala, and Gujarat are spearheading this transformation, each contributing unique strengths—ranging from Bengaluru’s software exports and Hyderabad’s innovation hubs to Tamil Nadu’s SaaS sector and Kerala’s Technopark expansion.
Proactive state-level IT policies, investment incentives, and dedicated IT corridors ensure a supportive environment for both domestic and global investors. Companies looking to invest in Indian states IT sector can leverage these regions not just for access to a vast market but also for a sustainable ecosystem designed for long-term IT and ITeS growth.
