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Performance & Contribution towards Exports by IT-ITES Industry

Revenue

As shown in figure 1, Indian IT-ITES industry revenue is estimated at USD 129.5 billion in FY2015-16 as compare to USD 118.8 billion in FY2014-15, registering an increase of around 9.0%. The overall industry’s growth of this sector over the last five years is given in the table below.

IT – ITES Industry Revenue Trends (in USD billion)
Year/ Description 2011- 12 2012- 13 2013- 14 2014- 15 2015- 16(E) CAGR % (2011-16)
Exports 68.8 76.5 87.3 97.8 107.8 12.81
Domestic 19.0 19.2 19.0 21.0 21.7 4.64
Total 87.8 95.7 106.3 118.8 129.5 11.16
Source: Nasscom, E: Estimate

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Exports

As shown in figure 2, IT-ITES exports is estimated to gross USD 107.8 billion in FY2015-16, growing by 9.0% over FY 2014-15 and contributing nearly 83% of the total IT-ITES revenues (excluding hardware). 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.

During FY 2015-16, IT services exports (excludes BPO, Engineering, R&D and Software products) is expected to register an y-o-y growth of over 10.3%, generating exports of USD 61.0 billion, driven by collaboration, communication, business intelligence projects, and integration of SMAC services with traditional offerings. During FY 2015-16, ITES/BPO exports are likely to be USD 24.4 billion with a growth rate of ~8.4% over FY2014-15. Software products and ER&D segment is estimated to generate exports of US$ 22.4 billion in FY 2015-16 with y-o-y growth rate of ~12%. The domain specific solutions focusing on convergence, customization, efficiencies and localization, M2M technology and newer technologies around SMAC are playing a significant role in driving the growth of ER&D and software products. With over 3,100 firms, India is emerging as a hotbed for software products with SMAC and a supportive ecosystem creating successful stories.

Segment wise export Revenue Trends in IT – ITES Industry (in USD billion)
Year/ Segment 2011- 12 2012- 13 2013- 14 2014-15 2015-16(E) CAGR % (2011-16)
IT Service 39.9 42.9 49.2 55.3 61.0 12.73
ITeS-BPO 15.9 18.3 20.4 22.5 24.4 11.43
Software Products, Engineering Services, R&D 13.0 15.3 17.7 20.0 22.4 14.46
Total IT-ITeS 68.8 76.5 87.3 97.8 107.8 12.81
Source: Nasscom, E: Estimate

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As per figure 3, the IT Services exports accounts for the largest share of 57.76 %; BPO exports contributing 21.62 % followed by ER&D and software products that together account for 20.62%.

IT-BPO Revenue Share (Year 2015-16)

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Domestic Market

As shown in figure 4, Domestic IT-ITES revenue (excluding hardware) is estimated to reach INR 1408 billion in FY2015-16, as compared to INR 1289 billion in FY2014-15, a y-o-y growth of ~9.22%. During FY2014-15, domestic IT services growth is likely to be at 9.67% as large enterprises exhibit cautious spending pattern; driven by technology upgrades in BFSI, telecom and State Governments, and compliance of MIS investments. The domestic BPO services growth is estimated at ~8.72% in FY2015-16, driven by demand from select customers reverting to outsourcing business processes, especially from the BFSI, automotive and retail sectors. Domestic software products is estimated at 8.22% due to increased demand for retail, healthcare, education, manufacturing (vertical-specific) and SMAC (Social media, mobility, analytics and cloud) - based solutions.

Segment wise Domestic Revenue Trends in IT – ITES Industry (in INR Crores)
Year/ Segment 2011- 12 2012- 13 2013- 14 2014- 15 2015- 16(E) CAGR % (2011-16)
IT Service 58907.6 66300 72721.6 81662 89562 12.33
ITeS-BPO 14849.1 17500 19593.8 21490 23364 12.97
Software Products, Engineering Services 18009.6 20500 22468.8 25788 27907 11.91
Total IT-ITeS 91766.4 104700 114784.2 128940 140833 12.35
Source: Nasscom, E: Estimate

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