In this blog post
Contribution of the IT industry in India’s GDP
IT-based services are vital for any organization to increase productivity, makes business process flow easily, and grow efficiently and economically in this competitive world. The IT industry has not only impacted the economic growth of India, but it also has made the government more accessible and competent. Information Technology has made access to government-related services and information easier and inexpensive. IT has made the management and delivery of government services like health care services, education information, consumer rights, and services, etc. seamless with enhanced transparency.
The IT industry is essential for our economy to prosper exponentially and to generate millions of job opportunities. India’s IT and business services market is projected to reach US $19.93 billion by 2025. The industry has attracted significant investment from other countries. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 74.12 billion between April 2000 and June 2021. The sector ranked second in FDI inflows as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT).
Growth of the IT industry
The exponential growth of the IT companies in India for the past two decades has played an important role in changing how the world views India. The liberalization policies such as reducing the trade barriers and eradicating the import duties on technology products by the Government of India are instrumental in the evolution of the IT industry.
In recent times, economies have been hit hard by the pandemic. Technology stood by our side as a true enabler. The IT industry has extended its unrelenting support, with most activities and businesses moving online.
IT Sector and the GDP
The IT companies have increased their contribution to India’s GDP from 1.2% in 1998 to almost 8% in 2018 and 7.7% of India’s GDP in 2020 amidst the COVID-19 situation. According to the Software Technology Park of India (STPI), software exports by the IT companies stood at a whopping 1.20 Lakh crore (US$16.29 billion) in the 1st quarter of financial year 22 (FY22). The Information Technology and business service industry’s revenue is at approximately US$6.96B in the first half of the year 2021 and an increase of 6.4% Year of Year (YoY). The export revenue of the IT companies is at approximately US$150B in FY21. According to Gartner, IT companies spending is estimated to reach US$93B in 2021 with 7.3% YoY Growth in India and further increase to US$98.5B in 2022. The IT and BPM industry together have greater than 4.5 million workers as of FY21.
The country’s digitally skilled pool has grown gradually and accounted for around 75% of global digital talent. The four largest IT firms in India (TCS, Infosys, Wipro, HCL Tech) have employed over 1 million employees. New IT-based technologies like remote monitoring, cloud services, AIOps like GAVS’ own Zero Incident FrameworkTM (ZIFTM), among are increasing the demand in the digital economy of the nation. The rollout of 5G communication Technology and the growing adaptation of AI, Big analytics, cloud computing, and the Internet of things (IoT) will further expand the size of the IT sector in India. As the Indian digital economy grows, the IT companies have started their main centers in tier 2 and tier 3 cities which will further develop the growth and reduce the existing disparities. The Government has announced that it will focus on new age technologies such as cybersecurity, hyper-scale computing, artificial intelligence and blockchain.
India is expected to have a digital economy of $1 trillion by 2025. ITS – India’s Technology Services industry is likely to achieve $300-350B in the yearly revenue by the year 2025, if it can utilize the fast-emerging business potential in cloud, AI, cybersecurity, and other rising technologies.