Fact Sheet of IT & BPM Industry

India’s Strength in this sector / reasons to invest

  • IT- BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing immensely to the country’s GDP (9.3%) and public welfare.
  • India has captured a sizeable portion of the global technology sourcing business. The Indian IT industry’s (including hardware) share in the global market stands at 7% and growth has been largely due to exports.
  • 60% firms use India for testing services before taking software products global
  • Expected growth – ( 10.7% over FY2016 );
  • Cost Leadership – savings of > USD 200bn for clients in the past 5 years
  • India has a rapidly growing urban Infrastructure fostering several IT centres in the country; 50 cities for service delivery

Basic Facts of the Sector

(Statistics)

  • Expected IT-BPM revenues – USD 154 bn in FY 2017 (estimated);
  • Exports – USD 117 bn in FY 2017 (estimated) (IT services - USD 65 bn;BPM – 26 bn; Engineering and R&D services (ER&D) - USD 25 bn;)
  • More than 15,000 firms; of which 1000+ are large firms.
  • Largest private sector employer – 3.7 mn jobs
  • Sector accounts for largest share in total services exports (38%)
  • ~600 offshore development centres (ODCs) of 78 countries

Growth Drivers

  • Emerging geographies and verticals; non-linear growth due to platforms, products and automation
  • Revival in demand for IT services from US and Europe
  • Increasing adoption of technology and telecom by consumers and focused Government initiatives – leading to increased ICT adoption
  • High value client additions (> USD 1m) – highest in last 5 years (>13.5% growth)
  • Emerging verticals (retail; healthcare; utilities) driving growth (>14%)
  • SMAC (social, mobility, analytics, cloud) market to be USD 225bn by 2020.
  • USD 1.6bn spent annually on training workforce ; Growing R&D spend;
  • National Optical Fibre Network (NOFN) is being laid down in phases to connect all the 2,50,000 Gram Panchayats in the country

FDI Policy

  • FDI up to 100% under the automatic route is allowed in data processing, software development and computer consultancy services; software supply services; business and management consultancy services, market research services, technical testing and analysis services.

Sector Policy

  • National Policy on Information Technology 2012 aims to increase revenues of IT and BPM industry to US$ 300 billion by 2020. The policy also seeks to achieve the twin goals of brining the full power of Information and Communication Technology (ICT) within the reach of the whole of India and harnessing the capability and human resources of the country to enable India to emerge as the Global Hub and Destination for IT and BPM Services by 2020.
  • Other Initiatives :
    • Establishment of Software Technology Parks of India (STPIs)
    • Special Economy Zones (SEZs) Policy
    • National Task Force on IT and Software Development
    • National e-Governance Plan (NeGP)
    • National Cyber Security Policy 2013

Financial Support

(Incentives)

  • Exports Incentives: Exports incentives under foreign trade policy.
  • Areas based Incentives: Incentives for units in SEZ as specified in respective acts.
  • State Incentives: Benefits are also available under state industrial/IT policies.

Investment Opportunities

  • Setting up of IT Services ; BPM; software products companies ; shared service centres
  • BPM – Fastest growing sectors - knowledge services ; data analytics; legal services; Business Process as a Service (BPaaS) / cloud based services
  • IT Services – Fastest growing sectors – Solutions and Services around SMAC; IS outsourcing; IT consulting; software testing
  • ER&D – Fastest growing sectors – telecom & semiconductors

Foreign Investors in India

Accenture (Ireland)

Cognizant (USA)

HP (USA)

Capgemini (France)

IBM (USA)

Atos (France)

Microsoft (USA)

CDNS (USA)

Intel (USA)

Dell International (USA)

Agilent Technologies (USA)

Mentor Graphics (USA)

Oracle Corporation (USA)

Qualcomm (USA)

Steria (France)

Ricon (Japan)

SAP (Germany)

TIBCO (USA)

Applied Materials (USA)

Philips (Netherlands)

Important Agencies

(Ministry / Sectoral chamber with website)

  • Ministry of Electronics & Information Technology, Government of India (http://meity.gov.in/)
  • National Association of Software and Services Companies (NASSCOM) (www.nasscom.in)
  • Indian Software Product Industry Round Table (iSPIRT) (www.ispirt.in)
  • Other Service Providers Association of India (OSPAI) (www.ospai.in)
  • Data Security Council of India ( www.dsci.in)