IT and BPM

Summary
  • India’s e-commerce market is projected to grow at 18% annually through 2025. *
  • IT hardware is estimated to achieve INR 3 tn worth production in 4 years (by 2025) and domestic value addition is expected to rise from the current 5-10 % to 20-25 % in 5 years. *
  • The Telecom industry in India is the second largest in the world with a subscriber base of 1.17 bn as of August 2022 (wireless + wireline subscribers). *
  • India has an overall tele-density of 85.11 %, of which, the tele-density of the rural market, which is largely untapped, stands at 58.37% while the tele-density of the urban market is 134.78%. *
Reasons to Invest
  • The National Broadband Mission of the Government of India is focused to fulfil the vision of 'Broadband for All' of the National Digital Communications Policy 2018. Under the mission, the following deliverables and outcomes are planned: *
    • Provide broadband access to all villages
    • Availability of high broadband speeds
    • Increase present route length of 22 lakh km the Optical Fiber Cable (OFC) to 50 lakh km
    • Enhance connectivity and improve Quality of Service by increasing tower density
    • Increase fiberization of telecom towers from 30% to at least 70%
    • Create a Geographic Information System (GIS) based tool and set up a National Fiber Grid to keep a mapping of entire OFC network in the country
    • Facilitate rollout of 5G network and strengthening of 4G network
    • Promote Make in India by promoting domestic manufacturing and incentivizing homegrown broadband products
    • Rapidly growing urban infrastructure has fostered several IT centres in the country. 
  • Cabinet approves a project for saturation of 4G mobile services in uncovered villages at a total cost of INR 26,316 Cr. *
  • India secured 1st rank in “AI talent concentration”. *
  • India secures 2nd rank in “Mobile broadband internet traffic within the country” and “International Internet bandwidth”. *
  • India secures 3rd rank in “Annual investment in telecommunication services” and “Domestic market size”. *
  • India secures 5th rank in “FTTH/Building Internet subscriptions” and “AI scientific publications”. *

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Key Achievements
  • Internet connections jumped from 25.15 crore in March 2014 to 83.69 crore in June 2022, registering a growth of 232%. *
  • Cross-border connectivity launched between UPI of India and PayNow of Singapore. *
  • IT to help MSMEs: Union Minister for MSME Shri Narayan Rane launched the MSME Competitive (LEAN) Scheme today which will help MSMEs implement LEAN manufacturing tools like 5S, Kaizen, KANBAN, Visual workplace, Poka Yoka etc under the able guidance of trained and competent LEAN Consultants *
  • UIDAI recently allowed the residents to verify email/mobile number seeded with Aadhaar.*
  • India climbs up six slots and now placed at 61st rank as per Network Readiness Index 2022. *
Recent Announcements

17th August 2023: India Signs MoU with Trinidad and Tobago on sharing INDIA STACK

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08th June 2023:  Union Cabinet approves allotment of 4G/5G Spectrum to BSNL

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05th June 2023:  MeitY transfers cost effective Li-ion battery recycling technology to nine recycling industries and start-ups

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17th May 2023: Cabinet approves PLI Scheme – 2.0 for IT Hardware with a budgetary outlay INR 17,000 cr.

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11th May 2023: NeGD organises 36th CISO Deep-Dive Training under Cyber Surakshit Bharat to educate CISOs to understand cyber-attacks and get exposure in latest technologies.

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Statistics
  • In FY 2022-23, eAuction India processed 36,591 auctions worth INR 13,450 Cr.*
  • So far, 196,544 Gram Panchayats are connected through the BharatNet project and 650,080 Km of OFC has been laid. Additionally, 601,026 Fibre-To-The-Home (FTTH) connections are commissioned and 104,674 Wi-Fi hotspots are installed to ensure last-mile connectivity. (as on 07.08.2023).*
  • 800 Digital Villages have been setup as on 31st July 2023. *
Growth Drivers
  • MeitY has allocated INR 2,600 cr for the Incentive Scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions for FY 2022-23. *
  • MeitY has proposed new rules to allow non-governmental entities to use Aadhaar authentication, promoting ease of use and accessibility for individuals.*
  • The mission planned for 2023-2031 aims to seed, nurture, and scale up scientific and industrial R&D and create a vibrant & innovative ecosystem in Quantum Technology (QT).*
  • 254 4G mobile towers dedicated to the Nation.*
  • India and Germany agree to work together with focus on Artificial Intelligence (AI) Start-Ups as well as 'AI' research and its application in Sustainability and Health care.*
  • Unified Payment Interface (UPI) is the leading digital payment platform and has onboarded 376 banks and has facilitated 730 crore transactions (by volume) worth INR 11.9 lakh cr.*
  • Bharat Net project aims to connect Wi-Fi access points in all 2,50,000 gram-panchayats (village councils) in the country.*
  • Mission Digital India Bhashini  aims to increase the content in Indian languages on the Internet substantially in the domains of public interest, particularly, governance-and-policy, science & technology, etc., which will encourage citizens to use the Internet in their own language.*
FDI Policy
  • The government of India has allowed up to 100% Foreign Direct Investment (FDI) under the automatic route in the IT & BPM sector.
  • Hon'ble PM Shri Narendra Modi has approved the FDI proposal of INR 2480.92 cr in M/s. ATC Telecom Infrastructure Private Limited by M/s. ATC Asia Pacific Pte. Ltd.*
  • The cumulative FDI equity inflow in Computer Software & Hardware is USD 94.92 bn during the period April 2000 to March 2023. This constitutes 15 % of the total FDI inflow received across sectors. *

 

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Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Schemes for Large Scale Electronics Manufacturing and IT Hardware for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.

Production Linked Incentive Scheme (PLI) for IT Hardware, Read More

Financial Outlay- INR 7,325 cr

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For more details on PLI Schemes, Click Here

Sector Policy

Universal Service Obligation Fund (USOF) Scheme* :

  • USOF scheme is launched for provision of mobile services in Uncovered Villages of Aspirational Districts across five states of Andhra Pradesh, Chhattisgarh, Jharkhand, Maharashtra & Odisha. 7,287 uncovered villages of 44 Aspirational Districts across five States to get 4G based mobile services at the estimated cost of about INR 6,466 cr.

Prime Minister's Wi-Fi Access Network Interface (PM-WANI)* :

  • The Union Cabinet on 9th December 2020 has approved the setting up of Public Wi-Fi Networks by Public Data Office Aggregators (PDOAs) to provide public Wi-Fi service through Public Data Offices (PDOs). This will encourage technology entrepreneurs to develop and deploy Wi-Fi technology solutions triggering Make in India. 

Production Linked Incentive Scheme (PLI) for IT Hardware* :

  • Hon’ble Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in IT and BPM Sector through the Department of Telecom of with a financial outlay of INR 12,195 crore over a five-year period for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.
  • The scheme proposes PLI to boost domestic manufacturing and attract large investments in the value chain of IT Hardware.
  • The Target Segments under the proposed Scheme include Laptops, Tablets, All-in-One PCs and servers.
  • The total cost of the proposed scheme is approximately INR 7,350 cr over 4 years, which includes an incentive outlay of INR 7,325 cr and administrative charges of INR 25 cr.
  • Over the next 4 years, IT Hardware companies have proposed production of over INR 1,35,000 cr, and Domestic Companies have proposed a production of over INR 25,000 cr. The scheme is expected to promote exports significantly.
  • The scheme will bring additional investment in electronics manufacturing to the tune of INR 2,350 cr.
  • The scheme will generate approximately 37,500 direct employment opportunities in the next 4 years along with the creation of additional indirect employment of nearly 3 times the direct employment.
  • Domestic Value Addition is expected to grow from the current 5-12% to 16-35%.

Software Technology parks of India (STP) Scheme * :

  • Software Technology Parks of India (STPI), an autonomous society under Ministry of Electronics and Information Technology is implementing Software Technology parks of India (STP) Scheme.
  • 100% export oriented Scheme for the development and export of computer software, including export of professional services using communication links or physical media.
Financial Support

UNION BUDGET 2023-24*

  • The total budgetary allocation for FY 2023-24 towards the Department of Telecommunications is INR 97579.05 cr.

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.

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.

 

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.

 

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Sector Reports
  1. Department of Telecom: Telecom Reforms- 2022
  2. Satellite Communications Reforms- 2022
  3. Year End Review 2022: Ministry of Electronics and Information Technology (MeitY)
  4. Simplifying E2E Security Across Attack Kill Chain (Joint POV Paper by DSCI and Microsoft)
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. “Catalyzing the Ecosystem for A Trillion Dollar Digital Economy,” NASSCOM, https://www.nasscom.in/sites/default/files/NASSCOM-annual-guidance-fy-2018.pdf
  3. “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
  4. “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
  5. “National Broadband Mission,” Department of Telecommunications,  https://dot.gov.in/sites/default/files/National%20Broadband%20Mission%20-%20Booklet_0.pdf?download=1
  6. “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
  7. “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
  8. “Budget 2019-2020,” India Budget, https://www.indiabudget.gov.in/budget2019-20/index.php
  9. “Home Page,” Startup India, https://www.startupindia.gov.in/
  10. “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
  11. “BharatNet Usage Status as on 20-05-2019,” BBNL, http://www.bbnl.nic.in/BharatNet.pdf
  12. “Summary of Budget 2018-19,” Ministry of Finance, PIB,  http://pibarchive.nic.in/newsite/PrintRelease.aspx?relid=176062
  13. “Highlights Of Interim Budget 2019-20,” Ministry of Finance, PIB, http://pibarchive.nic.in/newsite/PrintRelease.aspx?relid=187934
  14. "Summary of Union Budget 2020-21", PIB, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1601475
  15. “National Policy on Software Products (2019),” MeitY, https://meity.gov.in/writereaddata/files/national_policy_on_software_products-2019.pdf
  16. “Software Technology Park of India,” Invest India, https://static.investindia.gov.in/Software%20Technology%20Parks%20%28STP%29%20Scheme.pdf
  17. PIB, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1668396 
  18. PIB, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1675607
  19. PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1677688
  20. PIB Release, https://pib.gov.in/PressReleseDetail.aspx?PRID=1687591
  21. PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1700431
  22. PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1727552
  23. Factsheet on FDI - April 2000 to March 2022, Department for Promotion of Industry and Internal  Trade, https://dpiit.gov.in/sites/default/files/FDI_Factsheet_March_2022_23May2022.pdf 

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