IT AND BPM

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SUMMARY
  • IT-BPM sector accounts for largest share in total Indian services export (45%).
  • IT-BPM sector accounts for 56% of the total global outsourcing market.
  • 640 offshore development centers in more than 80 countries.
  • Indian IT & BPM industry is expected to grow to USD 300 billion by 2020.
  • IT - BPM sector constitutes ~ 9.3% of India's GDP.
  • IT-BPM is the largest private sector employer - delivering 3.7 million jobs.
REASONS TO INVEST
  • India’s IT – BPM industry amounts for 56% of the global outsourcing market size.
  • Rapidly growing urban infrastructure has fostered several IT centers in the country.
  • Favorable government policies and incentives to facilitate investments in IT sector.
  • Presence of skilled manpower, India is home to a large number of IT professionals.
STATISTICS
  1. IT BPM industry revenues (excluding hardware) is estimated at around USD 130 billion (2015-16).
  2. Exports from the IT-BPM industry stands at USD 107.8 billion for Financial Year 2015-16 (Segment wise breakup is as under):
    • IT services - USD 61.0 billion
    • The BPM industry exports - USD 24.4 billion
    • ER&D and Software Product Development - USD 22.4 billion
  3. The IT industry has more than 16000 firms; of which 1000+ are large firms with over 50 delivery locations in India.
  4. The IT-BPM industry is the largest private sector employer – delivering 3.7 million jobs.
  5. The sector accounts for 45% share in total services export from the country.
  6. India is ranked as the 3rd largest tech based start-up hub in the world with over 4200 start-ups in the country.
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 Information and communication technology adoption.
  • Use of IT in emerging verticals (retail, healthcare, utilities) are driving growth in Indian IT sector.
  • India has been creating a future-ready digital workforce, with more than 0.15 million employees SMAC (social, mobile, analytics, cloud) skills.
  • The SMAC (social, mobility, analytics, cloud) market is expected to grow to USD 225 billion by 2020.
  • USD 1.6 billion is spent annually on training workforce and growing R&D spend.
  • The National Optical Fibre Network (NOFN) is being laid down in phases to connect all the 0.25 million gram panchayats in the country.
  • The government's Digital India Campaign envisages a USD 20 billion investment covering mobile connectivity throughout the country, re-engineering of government process via technology and enabling e-delivery of citizen services.
FINANCIAL SUPPORT

PROVISIONS OF THE 2015-2016 UNION BUDGET :

  • Tax rate on royalty and fee for technical service payable to non-residents has been reduced from 25% to 10%.
  • The National Optical Fibre Network Programme (NOFNP) to be further speeded up by allowing willing states to execute on reimbursement of cost basis as determined by Department of Telecom.
  • Supporting technology driven start-ups - Creating of innovation Promotion Platform and Techno-financial and facilitation support scheme
  • Self Employment and Talent Utilization (SETU) to establish as techno-financial, incubation and facilitation programme to support all aspects of start-up business.
  • Transfer Pricing - Increase in Domestic Transfer pricing threshold from USD 769,230 to USD 3.07 million.
  • Reduction in tax rate on Royalty and Fees from Technical services from 25% to 10%
  • CENVAT credit time limit for availment increased from 6 months to 1 year.
  • General Anti-Avoidance Rule (GAAR) deferred by another two years and will be implied prospectively.
  • 2 days time for service tax/ excise duty registration; electronic filing including digital signature.
  • Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of USD 3.07 billion, and credit guarantee corpus of USD 461.53 million aiming to infuse funding among the new generation entrepreneurs.
INVESTMENT OPPORTUNITIES
  • The setting up of IT services, BPM, software product companies, shared service centres.
  • Fast-growing sectors within the BPM domain – knowledge services, data analytics, legal services, Business Process as a Service (BPaaS), cloud-based services.
  • IT Services and fast-growing sectors within it such as solutions and services around SMAC, IS outsourcing, IT consulting, software testing.
  • Engineering and R&D within which the fastest growing sectors are – telecom & semiconductors.
FOREIGN INVESTORS
  • 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)
  • Ricoh (Japan)
  • SAP (Germany)
  • TIBCO (USA)
  • Philips (Netherlands)
AGENCIES
ACHIEVEMENT REPORT
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