Technology and Research & Development (R&D)
With over 3.7 million jobs, the IT sector is the largest private sector employer in India. There are nearly 16,000 IT companies in India and new companies are being added daily. This is because the Indian market offers cost-effectiveness, high quality, great reliability, fast delivery and the use of state-of-the-art technologies in the IT industry.
India is a popular IT destination for many companies. In fact, several international organisations have set up offices in India, such as Intel, IBM and Microsoft. This has led to a large increase in Foreign Direct Investment (FDI) in India. With around 67% of the global market, India is the world's largest outsourcing destination for the IT industry. The growth of the IT industry has led to the economic transformation of the country and has helped India position itself more firmly on the global stage.
Market statistics on IT sector in India
The IT industry was worth $177 billion in 2019 and this is expected to grow to $350 billion by 2025.
The IT sector contributed 7.7% to India's GDP in 2022 and is expected to rise to 10% by 2025.
The IT industry's domestic revenues are estimated at $49 billion and export revenues at $181 billion by 2022.
The largest segment of the market is outsourcing IT and R&D to India with a market volume of $8 billion by 2023.
The IT sector ranks third in terms of the share of Foreign Direct Investment (FDI).
COVID-19 Impact
IT companies have seen a significant slowdown in growth in 2020-2021 due to the COVID-19 pandemic. But with the rapid transition from office to home-based work, India's software and services exports grew 8.1% to $147 billion in fiscal 2020.
That growth has continued in subsequent years, resulting in IT and R&D sector growth of 15.5% and $227 billion in revenue by 2022. This is partly due to the fast-growing outsourcing segment. With both Europe and the United States facing major shortages of highly skilled, technical personnel, such as developers and programmers, and remote working becoming commonplace, more and more foreign companies are choosing to outsource their IT and R&D to India. Accordingly, revenues from this segment are expected to show an annual growth rate of 12.4%, resulting in a market volume of $12.5 billion by 2027.
Growth drivers of India's IT sector
India is emerging as the hub for digital skills. The World Economic Forum has declared India the Artificial Intelligence (AI) hub of the future
India has one of the largest talent pools of highly skilled, technical personnel in the world. In addition, salaries are still comparatively low. This makes the country a very attractive destination for outsourcing IT and R&D.
55% of all IT services outsourced globally end up in India.
In February 2019, the Government of India launched the National Policy on Software Products 2019 with an aim to make India the country for software manufacturing.
IT spending in India was nearly $110 billion by 2022.
The major players in the IT sector in India
National IT players in India
Infosys
Wipro
Tata Consultancy Services
Tech Mahindra
HCL Technologies
Larsen & Toubro
Infotech
International IT players in India
IBM
Google
Microsoft
Accenture
Intel
Dell
Apple Inc.
SAP
Oracle Corporation
Capgemini
Cognizant
Interesting investment opportunities
Affordably outsource your IT, R&D, software development, etc, now that there is an acute shortage of technical staff in both Europe and the United States.
India is the emerging R&D hub in sectors such as pharmaceuticals, automobiles, and biotechnology.
India aims to become the new leading chip and semiconductor hub worldwide.
Do you have a specific question about the opportunities or possibilities for your company or product in India's IT and R&D sector?
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