IT & ITES Sector

IT & ITES Sector

IT & ITES Sector


  • Global Technology spending stood at USD 3.65 tn during 2018-19.
  • The IT-BPM industry in India accounts for 55% of the total global outsourcing market. In India, it accounts for more than 45% share, which is the largest, in total services export.
  • The IT-BPM industry in India constitutes 8% of India's GDP. The industry is the largest employer within the private sector, employing 3.9 mn people.
  • Indian IT & BPM industry is expected to grow to USD 310 Bn by 2020.
  • About 200 Indian IT firms are present in around 80 countries.
  • Total export revenue of the industry is expected to grow 8.1 percent y-o-y to US$ 147 billion in FY20. IT & BPM sector accounted for the largest share in the Indian services export at 45 percent.
  • The total number of employees grew to 1.02 million cumulatively for four Indian IT majors (including TCS, Infosys, Wipro, HCL Tech) as on December 31, 2019.
  • Indian IT industry employed 205,000 new hires and had 884,000 digitally skilled talent in 2019.


The global sourcing market in India continues to grow at a higher pace compared to the IT-BPM industry. The global IT & ITeS market (excluding hardware) reached US$ 1.2 trillion in 2016-17, while the global sourcing market increased by 1.7 times to reach US$ 173-178 billion. India remained the world’s top sourcing destination in 2016-17 with a share of 55 per cent. Indian IT & ITeS companies have set up over 1,000 global delivery centres in over 200 cities around the world.
More importantly, the industry has led the economic transformation of the country and altered the perception of India in the global economy. India’s cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be the mainstay of its Unique Selling Proposition (USP) in the global sourcing market. However, India is also gaining prominence in terms of intellectual capital with several global IT firms setting up their innovation centers in India.


  • The internet industry in India is likely to double to reach US$ 250 billion by 2020, growing to 7.5 percent of gross domestic product (GDP). The number of internet users in India is expected to reach 730 million by 2020, supported by the fast adoption of digital technology, according to a report by the National Association of Software and Services Companies (NASSCOM).
  • Indian IT exports are projected to grow at 7-8 percent in 2017-18, in addition to adding 130,000-150,000 new jobs during the same period.
  • Indian IT and BPM industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion out of the total revenue.
  • The E-commerce market in India is set to grow at 30 percent annually to hit US$ 200 billion gross merchandise value by 2026 according to investment bank Morgan Stanley.
  • Indian technology companies expect India’s digital economy to have the potential to reach US$ 4 trillion by 2022, as against the Government of India’s estimate of US$ 1 trillion.
  • Digital payment in India is expected to grow from 32 percent in 2013-14 to 62 percent in 2017-18 in terms of volume of transactions.
  • Total spending on IT by banking and security firms in India is expected to grow 8.6 percent year-on-year to US$ 7.8 billion by 2017.


  • As of 2018-19, the expenditure on global Technology stood at USD 3.65 Tn.  
  • India in 2018-19 witnessed 1,70,000 net new hires in the industry - a total of 6,00,000 digitally skilled human resources, and a 20-25% increase in learning and development budget of IT-BPM companies.4 
  • India’s IT-BPM industry amounts to 55% of the global outsourcing market size. 
  • Favorable government policies and incentives facilitate investments in IT industry. 
  • There is a presence of skilled manpower, as India is home to 4.14 mn IT-BPM professionals.5 
  • Rapidly growing urban infrastructure has fostered several IT centers in the country.  

What Are the Investment Opportunities In IT & ITs Industry?

  • The setting up of IT services, BPM, software product companies, shared service centers.
  • Fast-growing sectors within the BPM domain – knowledge services, data analytics, legal services, Business Process as a Service (BPaaS), cloud-based services.
  • IT Services and fast-growing sectors within it such as solutions and services around SMAC (Social, Mobile, Analytics, Cloud), IT consulting, software testing.
  • Engineering and R&D within which the fastest growing sectors are – telecom and semiconductors.


Some of the major initiatives taken by the government to promote IT and ITeS sector in India are as follows:

  • In May 2019, the Ministry of Electronics and Information Technology (MeitY) launched the MeitY Startup Hub (MSH) portal.
  • In February 2019, the Government released the National Policy on Software Products 2019 to develop India as a software product nation
  • The Government has identified Information Technology as one of 12 champion service sectors for which an action plan is being developed. Also, the Government has set up a Rs 5,000 crore (US$ 745.82 million) fund for realizing the potential of these champion service sectors.
  • As part of Union Budget 2018-19, NITI Aayog was to set up a national-level program to enable efforts in AI^ and leverage AI^ technology for developing the country.
  • In the Interim Budget 2019-20, the Government announced plans to launch a national program on AI* and the setting up a National AI* portal.
  • National Policy on Software Products-2019 was passed by the Union Cabinet to develop India as a software product nation.

Road Ahead

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. The IT industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion of the total revenue.
References: Media Reports, Press Information Bureau (PIB), Department for Promotion of Industry and Internal Trade (DPIIT), Department of Information and Technology, Union Budget 2020-21
Disclaimer: This information has been collected through a secondary source and ASC is not responsible for any errors in the same.

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