IT AND BPM

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SUMMARY
  • Global Technology spending stood at US$ 3.65 tn during 2018-19.1 
  • The IT-BPM industry in India accounts for 55% of the total global outsourcing market. In India, it accounts for more than 45% share, which is the largest, in total services export.
  • The IT-BPM industry in India constitutes ~ 7.9% of India's GDP. The industry is the largest private sector employer – employing around 4 mn people.2
  • There are 640 offshore development centres in more than 80 countries.
  • Indian IT & BPM industry is expected to grow to $310 Bn by 2020.3
REASONS TO INVEST
  • As of 2018-19, the expenditure on global Technology stood at $3.65 Tn.  
  • India in 2018-19 witnessed 1,70,000 net new hires in the industry - a total of 6,00,000 digitally skilled human resources, and a 20-25% increase in learning and development budget of IT-BPM companies.
  • India’s IT-BPM industry amounts for 55% of the global outsourcing market size. 
  • Favourable government policies and incentives facilitate investments in IT industry. 
  • There is a presence of skilled manpower, as India is home to 4 mn IT-BPM professionals.
  • Rapidly growing urban infrastructure has fostered several IT centres in the country. 
  • India ranked 77th in the World Bank’s Doing Business 2019 report. 6

 

STATISTICS
  • The IT-BPM industry revenues (excluding hardware) is estimated to be $181 Bn for 2018-19. For 2018-19, export revenues of the Indian IT-BPM industry are estimated to be $137 Bn.7  
  • The industry has more than 17,000 firms; 8 of which 1000+ are large firms with over 50 delivery locations in India.
  • The IT-BPM industry is the largest private sector employer – delivering around 4 mn jobs. The industry accounts for more than 45% share in total services export from India.8
  • India is the 2nd largest9 start-up ecosystem in the world with 18,000+ start-ups recognized by the government till May 2019.10
GROWTH DRIVERS
  • Emerging geographies and verticals, non-linear growth due to platforms, products and automation.
  • Revival in demand for IT services from the 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 the Indian IT industry.
  • India is creating a future-ready digital workforce, with more than 6,00,000 digitally skilled human resources. India’s IT-BPM firms witnessed a 20-25% increase in Learning & Development budget in 2018-19.11
  • About $1.6 Bn is spent annually on training workforce and growing R&D expenditure.
  • Bharat Net project aims to connect at least 5 Wi-Fi access points in all 2,50,000 gram-panchayats (village councils) in the country.12
  • The government's Digital India Campaign envisages a $20 Bn 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 Union Budget - 2018-19 and 2019-20

  • Allocation of Digital India doubled to $472 Mn in 2018-19.13
  • Interim Budget 2019-20 announced that 1,00,000 villages to be made Digital Villages by 2023-24.14

National Policy on Software Products (2019)

  • A dedicated Software Product Development Fund (SPDF) with a corpus of $145.65 Mn will be created in the form of Fund of Funds.15

Software Technology Park Scheme 

  • Custom duty exemption
  • Excise duty exemption
  • Central Sales Tax reimbursement
  • Corporate tax exemption on 90% export turnover
  • Sales in Domestic Tariff Area (DTA) up to 50% of the Freight On Board (FOB) value of exports permissible.16
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 (Social, Mobile, Analytics, Cloud), IT consulting, software testing.
  • Engineering and R&D within which the fastest growing sectors are – telecom and 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
KEY ACHIEVEMENTS
SOURCES
  1. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM website, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf, accessed on 03 June 2019
  2. “The IT-BPM Sector in India 2018 amplify digital,” NASSCOM website, https://community.nasscom.in/download.php?file=wp-content/uploads/attachment/nasscom-itsr--executive-summary-2018.pdf, accessed on 03 June 2019
  3. “Catalyzing the Ecosystem for A Trillion Dollar Digital Economy,” NASSCOM website, https://www.nasscom.in/sites/default/files/NASSCOM-annual-guidance-fy-2018.pdf, accessed on 03 June 2019
  4. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM website, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf, accessed on 03 June 2019
  5. “The IT-BPM Sector in India 2018 amplify digital,” NASSCOM website, https://community.nasscom.in/download.php?file=wp-content/uploads/attachment/nasscom-itsr--executive-summary-2018.pdf, accessed on 03 June 2019
  6. “India at 77 Rank in World Bank’s Doing Business Report,” Press Information Bureau website, http://pib.nic.in/newsite/PrintRelease.aspx?relid=184513, accessed 14 May 2019
  7. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM website, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf, accessed on 03 June 2019
  8. “The IT-BPM Sector in India 2018 amplify digital,” NASSCOM website, https://community.nasscom.in/download.php?file=wp-content/uploads/attachment/nasscom-itsr--executive-summary-2018.pdf, accessed on 03 June 2019
  9. “Interim Budget 2019-2020,” India Budget website, https://www.indiabudget.gov.in/ub2019-20/bs/bs.pdf, accessed on 03 June 2019
  10. “Home Page,” Startup India website, https://www.startupindia.gov.in/https://dipp.gov.in/sites/default/files/lu_4221.pdf, accessed on 03 June 2019
  11. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM website, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf, accessed on 03 June 2019
  12. “BharatNet Usage Status as on 20-05-2019,” BBNL website, http://www.bbnl.nic.in/BharatNet.pdf, accessed on 03 June 2019
  13. “Summary of Budget 2018-19,” PIB website: Ministry of Finance, http://pib.nic.in/newsite/PrintRelease.aspx?relid=176062, accessed on 03 June 2019
  14. “Highlights Of Interim Budget 2019-20,” PIB website: Ministry of Finance, http://pib.nic.in/newsite/PrintRelease.aspx?relid=187934, accessed on 03 June 2019
  15. “National Policy on Software Products (2019),” MeitY website, https://meity.gov.in/writereaddata/files/national_policy_on_software_products-2019.pdf, accessed on 03 June 2019
  16. “Software Technology Park of India,” Invest India website, https://static.investindia.gov.in/Software%20Technology%20Parks%20%28STP%29%20Scheme.pdf, accessed on 03 June 2019
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