IT SECTOR OVERVIEW-2020

Statistics, news & updates: everything you need to know about the IT-Industry in India

Snapshot

  • Summary
  • COVID-19 Impact
  • Industry Clusters
  • Growth Drivers
  • Key Players
  • Market Stats

Sub-Industries

  • Information Technology

Summary

With over 3.7 million direct jobs, the IT sector is the largest private sector employer in India. There are close to 16,000 IT firms in India. Further, there is an increasing number of start-ups popping up. This is because the Indian market offers cost-effectiveness, high quality, great reliability, quick deliveries and the use of state-of-the-art technologies in the IT Industry. India is a preferred IT destination for many companies. In fact, various international organizations have set up their offices in India. This has led to a great increase in Foreign Direct Investments in India. Moreover, between 2000 and 2016, the IT sector ranked 4th in total FDI inflow in the country.

With approximately 67% of the global market, India is the world’s largest sourcing destination for the IT Industry. More importantly, the industry has led to the economic transformation of the country. Further, it has helped India to make its mark on the global economic map.

COVID-19 Impact

Information Technology companies are seeing a significant slowdown in growth due to COVID-19 pandemic. The overall revenue of the IT sector is expected to fall by 2-7% in the next 6 months. According to the National Association of Software and Services Companies, India’s software and services exports grew 8.1% to $147 billion in the fiscal year 2020. However, with the coronavirus impact, most of the Information Technology companies have lowered their growth forecast to 3-6% from 6-8%.

Besides, India is one of the key contributors to worldwide IT services. It is projected that the global IT spends may decline close to 4% which will further impact India as well. This means India stands to lose more than $ 5 billion in IT services exports alone. Further, due to the coronavirus fear, future contracts worth up to $3 billion have been postponed by clients.

The statistics below are taken from Industry data available pre-Corona virus impact.

Map – Industry Clusters

IT Industry in India

Growth Drivers

  • India is emerging as the hub for digital skills.
  • In February 2019, the Government of India released the National Policy on Software Products 2019 to develop India as a software product nation.
  • In May 2019, the Ministry of Electronics and Information Technology (MeitY) launched the MeitY Startup Hub (MSH) portal.
  • The Information Technology industry is the largest private sector employer; employing around 4 million people.
  • India’s IT-BPM industry accounts for 55% of the global outsourcing market size.
  • Spending on information technology in India is close to US$ 90 billion in 2019.

Key Players in India

International

  • Cognizant, IBM, Google, Microsoft, Accenture, Dell, Apple Inc., SAP, Oracle Corporation, Capgemini

National

  • Infosys, Wipro, TCS, Tech Mahindra, HCL Technologies, Larsen & Toubro Infotech

Market Stats

  • The IT-BPM industry stood at $ 177 billion in 2019 and is expected to grow to $ 350 billion by 2025.
  • IT-BPM growth is estimated to expand at a CAGR of 9.1%.
  • The IT-BPM industry is the largest contributor to the total exports of the country, with 43% of the IT-BPM services being exported in 2018.
  • IT sector contributes 7.7% to India’s GDP.
  • IT industry ranks on 3rd position in terms of Foreign Direct Investment (FDI) share.
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