Performance & Contribution towards Exports by IT-ITES Industry

Revenue

As shown in figure 1, Indian IT-ITES industry revenue is estimated at USD 141.0 billion in FY2016-17 as compared to USD 129.5 billion in FY2015-16, registering an increase of around 8.8%. The overall industry’s growth of this sector over the last five years is given in the table below.

Year/ Description

2012- 13

2013- 14

2014- 15

2015- 16

2016- 17(E)

CAGR %

(2012-17)

Exports

76.5

87.3

97.8

107.8

117.0

11.20

Domestic

19.2

19.0

21.0

21.7

24.0

4.78

Total

95.7

106.3

118.8

129.5

141.0

9.94

Source: Nasscom, E: Estimate

 

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Exports

As shown in figure 2, IT-ITES exports is estimated as US $ 117.0 billion in FY2016-17, growing by 8.5% over FY 2015-16. A combination of solutions around disruptive technologies such as SMAC (Social media, mobility, analytics and cloud), artificial intelligence, embedded systems etc. have become the life-force of the industry.

IT Services is the fastest growing segment within the Indian IT-ITES sector. This segment is estimated to generate exports revenues of the order of US$ 66.0 billion in year 2016-17 as compared to US$ 61.0 billion in year 2015-16. ITES/BPO segment has been reinventing itself in the past few years and is expected to generate export revenue of the order of ~US $ 26.0 billion in year 2016-17 as compared to US $ 24.4 billion in year 2015-16. Engineering R&D and Product Development has registered a growth of about 11.6 % in the exports, which is estimated to reach US$ 25.0 billion in year 2016-17 from the level of US$ 22.4 billion in year 2015-16.

Year/ Segment

2012- 13

2013- 14

2014-15

2015-16

2016-17(E)

CAGR %

(2012-17)

IT Service

42.9

49.2

55.3

61.0

66.0

10.59

ITeS-BPO

18.3

20.4

22.5

24.4

26.0

10.34

Software Products,

Engineering Services, R&D

15.3

17.7

20.0

22.4

25.0

13.97

Total IT-ITeS

76.5

87.3

97.8

107.8

117.0

11.20

Source: Nasscom, E: Estimated

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As per figure 3, the IT Services exports accounts for the largest share of 56.0%; BPO exports contributing 22.5 % followed by ER&D and software products that together account for 21.5%.

 

IT-BPO Revenue Share (Year 2016-17)

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Domestic Market

As shown in figure 4, Domestic IT-ITES revenue (excluding hardware) is estimated to reach INR 1608 billion in FY2016-17, as compared to INR 1408 billion in FY2015-16, a y-o-y growth of ~8.5%. Though the IT-ITES sector is largely export driven, the size of the domestic market is also significant. In FY 2017, India’s domestic IT-BPM market is likely to grow 8.5% Y-o-Y to reach US $ 38 billion (~Rs.253500 crore), excluding e-Commerce as compared to US $22 billion in 2015-16. Rapid digitization is expected to further catalyse growth.

  • Domestic IT Services sector is the largest segment with close to 40.5% share, expected to reach Rs. 100500 crores in year 2016-17 as compared to Rs. 89562 crores in year 2015-16 with a estimated growth of about 12.21 % in INR terms.
  • Domestic ITES revenue is estimated to reach ~Rs. 26800 crore in year 2016-17 from Rs. 23364 crore in year 2015-16, a growth of 14.71 % in INR terms.
  • Domestic Engineering R&D and Product Development, which is estimated to reach Rs. 33500 crore in year 2016-17 from the level of Rs. 27907 crore in year 2015-16 with a YoY growth of 20.04 % in INR terms.

The IT-ITES industry domestic revenue growth trend over the past 5 years is as under:

Segment wise Domestic Revenue Trends in IT – ITES Industry (in INR Crores)

Year/ Segment

2012- 13

2013- 14

2014- 15

2015- 16

2016- 17(E)

CAGR %

(2012-17)

IT Service

66300

72721.6

81662

89562

100500

8.68

ITeS-BPO

17500

19593.8

21490

23364

26800

12.53

Software Products,

Engineering Services

20500

22468.8

25788

27907

33500

13.22

Total IT-ITeS

104700

114784.2

128940

140833

160800

8.96

 

Source: Nasscom, E: Estimated

 

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