IT AND BPM

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SUMMARY
  • Global Technology spending stood at USD 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 4.14 mn people.2
  • Indian IT & BPM industry is expected to grow to USD 310 Bn by 2020.3
REASONS TO INVEST
  • As of 2018-19, the expenditure on global Technology stood at USD 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 to 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 4.14 mn IT-BPM professionals.
  • Rapidly growing urban infrastructure has fostered several IT centres in the country. 
  • India ranked 63rd in the World Bank’s Doing Business 2020 report. 6

 

Explore more about infrastructure availability in IT and BPM sector >

STATISTICS
  • The IT-BPM industry revenue (excluding hardware) is estimated to be USD 177 Bn for 2018-19. 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 4.14 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 USD 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 USD 20 Bn investment covering mobile connectivity throughout the country, re-engineering of government process via technology and enabling e-delivery of citizen services.
FDI POLICY
  • The government of India has allowed up to 100% Foreign Direct Investment (FDI) under the automatic route in the IT & BPM sector.

 

Read more about Foreign Direct Investment Policy in India >

FINANCIAL SUPPORT

Provisions of Union Budget - 2018-19, 2019-20 and 2020-21 

  • Allocation of Digital India doubled to USD 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 It is proposed to provide USD 845 Mn to Bharatnet programme in 2020-21.15
  • It is proposed to provide an outlay of USD 1.13 Bn over a period five years for the National Mission on Quantum Technologies and Applications.

National Policy on Software Products (2019)

  • A dedicated Software Product Development Fund (SPDF) with a corpus of USD 145.65 Mn will be created in the form of Fund of Funds.16

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.17

 

Explore Government policies/schemes in IT and BPM sector >

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.

 

Explore projects to invest in IT and BPM sector >

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
SOURCES
  1. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf
  2. “Strategic Review: IT-BPM Sector In India 2019: Decoding Digital,” NASSCOM, https://www.nasscom.in/knowledge-center/publications/strategic-review-it-bpm-sector-india-2019-decoding-digital
  3. “Catalyzing the Ecosystem for A Trillion Dollar Digital Economy,” NASSCOM, https://www.nasscom.in/sites/default/files/NASSCOM-annual-guidance-fy-2018.pdf
  4. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf
  5. “Strategic Review: IT-BPM Sector In India 2019: Decoding Digital,” NASSCOM, https://www.nasscom.in/knowledge-center/publications/strategic-review-it-bpm-sector-india-2019-decoding-digital
  6. “India ranks 63 in World Bank’s Doing Business Report,” PIB, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1589055
  7. “India’s Share in World’s Commercial Services Exports Rise to 3.5 Per Cent in 2018: Economic Survey 2019-20”, PIB, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1601248
  8. “The IT-BPM Sector in India 2018 amplify digital,” NASSCOM, https://community.nasscom.in/download.php?file=wp-content/uploads/attachment/nasscom-itsr--executive-summary-2018.pdf
  9. “Budget 2019-2020,” India Budget, https://www.indiabudget.gov.in/budget2019-20/index.php
  10. “Home Page,” Startup India, https://www.startupindia.gov.in/
  11. “Industry Performance: 2018-19 and what lies ahead,” NASSCOM, https://www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf
  12. “BharatNet Usage Status as on 20-05-2019,” BBNL, http://www.bbnl.nic.in/BharatNet.pdf
  13. “Summary of Budget 2018-19,” Ministry of Finance, PIB,  http://pibarchive.nic.in/newsite/PrintRelease.aspx?relid=176062
  14. “Highlights Of Interim Budget 2019-20,” Ministry of Finance, PIB, http://pibarchive.nic.in/newsite/PrintRelease.aspx?relid=187934
  15. "Summary of Union Budget 2020-21", PIB, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1601475
  16. “National Policy on Software Products (2019),” MeitY, https://meity.gov.in/writereaddata/files/national_policy_on_software_products-2019.pdf
  17. “Software Technology Park of India,” Invest India, https://static.investindia.gov.in/Software%20Technology%20Parks%20%28STP%29%20Scheme.pdf
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