IT & BPM

February 2025
For updated information, please visit www.ibef.org
Table of Contents

Executive Summary 3

Advantage India 4

Market Overview 6

Recent Trends and Strategies 14

Growth Drivers and Opportunities 19

Key Industry Contacts 29

Appendix 31

2
Executive summary
1. Large contribution to the
Indian economy
• India's IT & BPM sector fuels 7.5% of
5. Accelerating demand for
GDP, projected to hit 10% by 2025. cloud and digital
• India's IT industry is likely to hit the US$
350 billion mark by 2026 and contribute
transformation
•
10% towards the country’s GDP.
The IT industry added 2.9 lakh new jobs
5 • This push towards cloud services has
boosted hyper-scale data centre
taking the industry’s workforce tally to 5.4 1 investments, with global investments
million people in FY23. estimated to exceed US$ 200 billion
annually by 2025. India is expected to
2. Strong growth gain a significant share in the global
market, with the country's investment
opportunities expected to hit US$ 5 billion annually by
• According to a recent report by EY India, 2025.
generative artificial intelligence (GenAI)
could enhance productivity in India’s retail 2 4
•
industry by 35-37% over the next five years.
India's IT industry is likely to hit the US$ 350
4. Most lucrative sector
billion mark by 2026 and contribute 10%
towards the country's gross domestic
for investments
product (GDP), Infomerics Ratings said in a • The computer software and hardware
•
report.
According to National Association of
3 sector in India attracted cumulative foreign
direct investment (FDI) inflows worth Rs.
Software and Service Companies
(Nasscom), the Indian IT industry’s revenue 7,53,893 crore (US$ 87.46 billion)
touched US$ 227 billion in FY22, a 15.5% 3. Export and employment growth between April 2000-September 2024. The
YoY growth and was estimated to have • Direct employment in the IT services and BPO/ITeS sector ranked second in FDI inflows as
touched US$ 245 billion in FY23. segment was estimated to reach 5.4 million in FY23 with per the data released by Department for
• As per a survey by AWS (2021), India is an addition of 290,000 people. Promotion of Industry and Internal Trade
expected to have nine times more digitally • Exports from the Indian IT services industry stood at Rs. (DPIIT).
skilled workers by 2025. This indicates that a
total of ~ 3.9 billion digital skill trainings are 17,15,380 crore (US$ 199 billion) in FY24. • Computer software and hardware make
expected by 2025. India will need 30 million up 15.11% of the cumulative FDI equity
digitally skilled professionals by 2026. inflows.

Note: BPM - Business Process Management, BPO- Business Process Management

Source: NASSCOM, DPIIT, News Articles, Statista

3
Advantage India

4
Advantage India

2. GROWING DEMAND
• Strong growth in demand for export from new verticals.
• In FY22, the top three Indian IT companies, TCS, Wipro 3. GLOBAL FOOTPRINTS
and Infosys, were expected to offer ~1.05 lakh job
opportunities due to the increasing demand for talent and • Indian IT firms have delivery centres across the
skill. world.
• By 2025, the Indian software product industry is projected
to hit Rs. 8,62,000 crore (US$ 100 billion) as companies • IT & BPM industry is well diversified across
seek to expand globally. verticals such as BFSI, telecom and retail.
• India‘s IT and business services market is projected to • Increasing strategic alliance between domestic
reach Rs. 1,71,796 crore (US$ 19.93 billion) by 2025.
• The IT spending in India is estimated to record a double- and international players to deliver solutions
digit growth of 11.1% in 2024, totaling Rs. 11,89,560 crore across the globe.
US$ 138.6 billion up from Rs. 10,74,914 crore (US$ 124.7
billion) last year. 4. POLICY SUPPORT
1. COMPETITIVE ADVANTAGE • The Union Budget 2025-26 has
sanctioned Rs. 2,000 crore (US$
• India’s technology industry is on track to 232 million) to accelerate AI
adoption and infrastructure
double its revenue to Rs. 43,10,000 development.
(US$ 500 billion) by 2030. • The Union Budget 2025-26
allocates Rs. 500 crore (US$ 58
• India’s overall Digital Competitiveness million) for a Centre of Excellence
Score of 60 (on 100) , Ahead of every in AI for Education, aiming to
enhance skills, personalize
BRICs nations besides China, reflects
the rise of tech talent in the country, 2 3 learning,
education.
and transform

• Japanese investments in the Indian IT • The government prioritizes

sector grew 4X between 2016-20. cybersecurity, hyper-scale
computing, AI, and blockchain.
Investments stood at US$ 9.2 billion With data costs at Rs. 10/GB
over the last two decades. (US$ 0.12/GB), India ranks
among the world's cheapest.
1 4 • The Ministry of Electronics and
Information and Technology
(MeitY) had approved 14 eligible
applicants under the production
linked incentive scheme (PLI) for
IT hardware.

Note: BFSI stands for Banking, Financial Services and Insurance, AI - Artificial Intelligence
Source : Nasscom,Invest India, News Sources

5
 Market Overview

MARKET OVERVIEW

6
Evolution of the Indian IT sector

2017
Pre-1995 1995-2000 2000-05 2005-2016
onwards

• By the early 90s, US- • With increased • Firms in India grew in • Firms in India became • The US$ 227 billion Indian
based companies began investment in R&D, terms of their size and multinational IT industry directly
to outsource work to low- India became a product scope of services offered companies with employed nearly 5.4 million
cost and skilled talent development destination as more and more western delivery centres across people and indirectly
pool in India companies set up their the globe employed another 15
bases in the country • India’s IT sector is at million people in FY23.
an inflection point,
• India ranked third among
moving from enterprise
global start-up ecosystems
servicing to enterprise
with more than 68,000 tech
solutions
startups.
• India’s rankings improved
seven places to the 39th
position in the 2024 edition
of the Global Innovation
Index (GII).

Source: TechSci Research, WIPO

7
Segments of India’s IT sector

IT & BPM sector

Business Process Software products and

IT services Hardware
Management engineering services

▪ Estimated market size was ▪ Estimated market size was ▪ Estimated market size was ▪ Estimated market size was
US$ 125 billion in 2023. US$ 47 billion in 2023. US$ 54 billion during 2023. US$ 18 billion in 2023.
Market size of BPM industry
▪ Over 81% revenue comes ▪ Over 83.9% of revenue ▪ The domestic market
is expected to reach US$ 54
from the export market. comes from export. accounts for a significant
billion by FY25.
share.
▪ BFSI continues to be the key ▪ It is estimated to have
▪ About 87% revenue comes
vertical for the IT sector. around 22.1% revenue share ▪ The share of hardware in the
from the export market.
in the Indian IT space in IT & BPM sector is estimated
▪ IT services is estimated to
▪ BPM is estimated to have a 2023. to be around 7.4% in 2023.
account for about 51.2% of
19.3% share of the IT & BPM
the IT & BPM market
market revenue in India in
revenue in India in 2023.
2023.

Source: NASSCOM, News Sources

8
India’s IT market size growing

▪ The IT industry added 2.90 lakh new employees in FY23, bringing the
total employment in the sector to 54 lakh employees.
▪ The global Information Technology (IT) market reached a value of Rs. Revenue growth of IT-BPM sector (In US$ billion)
9,07,16,880 crore (US$ 1,05,24 billion) in 2023 and is forecasted to
reach Rs. 23,20,93,500 crore (US$ 2,69,25 billion) by 2032, reflecting
a compound annual growth rate (CAGR) of 11.0%. 300
▪ India’s technology industry is on track to increase the revenue to Rs.
43,10,000 crore (US$ 500 billion) by 2030.
▪ Direct employment in the IT services and BPO/ITeS segment is 250
estimated to reach 5.4 million in FY23 with an addition of 2,90,000 53
people.
57
▪ The IT-BPM services revenue reached US$ 128.4 billion in FY23. 200
▪ In FY23 the Indian domestic IT & Business Services market was 46 193
valued at US$ 53 billion as against US$ 57 billion in FY22. 44
45
▪ By 2025-26, India is expected to have 60–65 million jobs that require 41 170
150
digital skills, according to a Ministry of Electronics & IT report titled 147 150
"India's trillion-dollar digital opportunity." 136
126
▪ India’s IT spending is anticipated to reach US$ 124.6 billion in 2024,
100
reflecting a 10.7% increase from 2023, according to Gartner.
▪ India’s public cloud services market grew to Rs. 32,756 crore (US$ 3.8
billion) in 1H2023, expected to reach Rs. 1,53,436 crore (US$ 17.8
billion) by 2027 50
▪ India’s digital economy is estimated to reach Rs. 86,20,000 crore (US$
1 trillion) by 2025.
▪ A recent Microsoft study highlights India's rapid adoption of Artificial 0
Intelligence (AI), with 65% of surveyed Indians having used AI—more FY18 FY19 FY20 FY21 FY22 FY23
than double the global average of 31%.
Export Domestic
▪ AI) is expected to boost India's annual growth rate by 1.3% by 2035,
according to NITI Aayog.
▪ The Karnataka government signed three MoUs worth US$ 13.4 million
to help the state's emerging technology sector.

Note- MoU- Memorandum of Understanding

Source: NASSCOM, Gartner, News Articles

9
Strong growth in IT & BPM exports

Growth in export revenue (US$ billion) Sector-wise breakup of export revenue (FY23)

250.0 CAGR 15.82%

200.0
24% IT Services
47.0
150.0
28.0 31.0 42.3
22.4 25.0 BPM
100.0
28.0 31.0 103.7 54%
24.4 26.0
50.0 70.0 74.0
61.0 66.0 E R&D and software
22%
products
0.0
FY16

FY17

FY18

FY19

FY23
IT services BPM Software Products and Engg. Services

▪ As an estimate, India’s IT export revenue rose by 9% in constant currency terms to US$ 194 billion in FY23.
▪ Export of IT services was the major contributor, accounting for more than 53% of total IT exports (including hardware).
▪ Hyderabad, known for its prominence in the IT sector, achieved exports worth Rs. 2.68 lakh crore (US$ 32.2 billion) in the FY24, with a workforce
of 9.46 lakh employees. This represents a YoY growth of 11.2%.
▪ BPM and engineering and R&D (ER&D) and software products exports accounted for 22% and 25%, respectively of total IT exports during FY23.
▪ According to STPI (Software Technology Park of India), software exports by the IT companies connected to it stood at Rs. 1.20 lakh crore (US$
16.29 billion) in the first quarter of FY22.
▪ In August 2021, the Minister of Electronics and Information Technology, Skill Development and Entrepreneurship, Mr. Rajeev Chandrasekhar,
announced that the IT export target was set at US$ 400 billion for March 2022. In addition, the central government was planning to focus on areas
such as cybersecurity, hyper-scale computing, artificial intelligence and blockchain.

Source: Nasscom, Make in India, IDC

10
BFSI - a key business vertical for IT & BPM industry

▪ BFSI is a key business vertical for the IT & BPM industry. A major Revenue share of IT majors from BFSI (FY24)
share of revenue of IT majors comes from the BFSI business vertical.
▪ Adoption of new technologies is expected to accelerate the growth of 40.00%
the BFSI vertical. The need to undertake investment in IT will also be
required to gain a competitive advantage instead of solely reducing
35.00%
operational costs.

33.50%
▪ In 2025, from the top-tier IT companies' perspective, there would be

32.00%
30.00%
an increase in uptake from the BFSI sector.
▪ HDFC Bank partnered with Flywire to enable their customers to make 25.00%

26.40%
fee payments digitally to overseas colleges and universities.
20.00%
▪ In November 2022, ICICI Bank introduced two new products for its

20.46%
NRI clients - Loan against Deposits (LAD) and Dollar Bonds, at its
branch in GIFT City. 15.00%

16.00%
▪ In August 2022, Network People Services Technologies (NPST)
10.00%
announced that it was working on a banking super app. The high-end
platform can be used by banks, fintech companies, and other BFSI
players, and it will offer a seamless user experience with all banking, 5.00%
financial, and transactional services combined into a robust, smart
app. 0.00%

Tech Mahindra

Infosys^
TCS
Wipro
Mindtree (2020)
▪ In July 2022, the Union Bank of India (UBI) launched a Metaverse
Virtual Lounge and Open Banking Sandbox environment in
partnership with Tech Mahindra.
▪ In February 2022, Bangalore based edtech startup ‘BygC’ launched
India’s first upskilling focused community platform for young graduates
and people seeking jobs in the BFSI sector.

Note: BFSI - Banking, Financial Services and Insurance, mentioned figures are for IT and BPM only and do not include engineering services and hardware exports, ^For the ‘Financial
Services’ vertical
Source: NASSCOM Quarterly Review, Ministry of Electronics and IT Annual Report, Company Financial Results and Factsheets, News Articles

11
With over 61% share, the US is a major importer of Tech services

▪ US has traditionally been the biggest importer of Indian IT exports, Geographic breakup of export revenue in FY23 (%)
as it absorbed over 62% of Indian IT & BPM exports during FY23.

▪ In FY24, the US was the largest destination for India's software

services exports, accounting for 54% of total exports.

▪ In FY24, the US dollar remained the principal invoicing currency for

2%
India's software services exports, with a 72% share. 8%
▪ UK stood second to the US, with 17% of the services being exported
to it. 11%
▪ Even though, US and UK were the leading customer markets with a
combined share of nearly 79%, there is a growing demand from
APAC, Latin America and Middle East Asia regions.

▪ Being the low-cost exporter of IT services, India is going to attract 17%

more markets in other regions in the same way it tapped the US 62%
market.

USA UK Continental Europe APAC Others

Note: APAC is Asia Pacific

Source: Nasscom, Department of Electronics and IT Annual Report

12
IT & BPM sector dominated by large players

2019

Number of Percentage of total Percentage of total

Category Work Focus
players export revenue employees

▪ Fully integrated players offering complete range of services

Large 11 47-50% ~35-38% ▪ Large scale operations and infrastructure
▪ Presence in over 60 countries

▪ Mid-tier Indian and MNC firms offering services in multiple

verticals
Medium 120-150 32-35% ~28-30%
▪ Dedicated captive centres
▪ Near shore and offshore presence in more than 30-35 countries

▪ Players offering niche IT & BPM services

~1,000-
Emerging 9-10% ~15-20% ▪ Dedicated captives offering niche services
1,200
▪ Expanding focus towards sub Fortune 500/1,000 firms

▪ Small players focusing on specific niches in either services or

Small ~15,000 9-10% ~15-18% verticals
▪ Includes Indian providers and small niche captives

Source: Nasscom

13
 Recent Trends and Strategies

RECENT TRENDS AND STRATEGIES

14
Notable trends

1
Global delivery model
▪ Indian software product industry is expected to reach Rs. 8,62,000 crore (US$ 100 billion) by 2025. Indian companies are focusing
on investing internationally to expand their global footprint and enhance their global delivery centres.
▪ As of September 2024, TCS employs more than 23,000 people in the UK and Ireland, making it among the region’s biggest IT
employers.

2
India to become the data annotation and labelling hub
▪ The data annotation market in India stood at US$ 250 million in FY20, of which the US market contributed almost 60% to the overall
value. The market is expected to reach US$ 7 billion by 2030 due to accelerated domestic demand for AI.

3
New technologies
▪ Disruptive technologies such as cloud computing, social media, and data analytics are offering new avenues of growth across
verticals for IT companies. In addition, emerging technologies like artificial intelligence, machine learning, blockchain, the Internet of
Things (IoT), and robotic process automation are driving further innovation and creating additional opportunities for market
expansion.
▪ In June 2022, ZStack International, a worldwide market leader in cloud computing, IaaS and PaaS solutions, announced that they
were entering India and the SAARC Region.
▪ American-Irish consumer credit reporting company Experian is planning a major expansion of its global innovation centre (GIC) in
Hyderabad to about 4,000 employees over the next three to five years. According to sources, GIC will concentrate on employing
emerging technologies in the BFSI (banking, financial services, and insurance) sector, including cloud computing, big data analytics,
artificial intelligence, and machine learning.

15
Strategies adopted

5. Product and pricing

1. Movement to SMAC and differentiation
digital space • Most of the IT companies have been

• SMAC (social, mobile, analytics and 5 offering similar products and services
to their clients.
cloud) is taking significant leaps. 1 • The companies are working towards
product differentiation through various
• Companies are getting into this field by
offering big data services, which provides other services by branding themselves,
clients with better insights for future for example, Building Tomorrow's
cases. Enterprise by Infosys.
• Indian IT firms have started to adopt
• In May 2022, it was announced that pricing strategies to compete with
Indians can now avail their Digilocker
services through Whatsapp to get easy 2 4 Global firms like IBM and Accenture.
access to their official documents.
• In April 2021, Wipro announced the 4. Product launch
implementation of a digital experience • In February 2024, Infosys introduced “Topaz”
platform for Bristol Water to modernize
critical infrastructure. 3 Responsible AI Suite, a set of 10+ offerings
built around the Scan, Shield, and Steer
framework. The framework aims to monitor
and protect AI models and systems from risks
and threats, while enabling businesses to
2. M&A apply AI responsibly.
• In January 2024, Infosys announced to 3. Promotion of R&D • In August 2022, Meta announced a
buy InSemi, a semiconductor and
• Companies are investing a lot in R&D and partnership with Reliance JioMart where
embedded services design company. WhatsApp users can order groceries on the
training employees to create an efficient
• The anticipated rise in mergers and messaging platform.
workforce, enhancing productivity and quality.
acquisitions within the software and
tech-enabled services sector in 2024 is • R&D forms a significant portion of companies’
expected to be approximately 3%, expenses, which is critical when margins are
extrapolated from the deal volumes under pressure, to promote innovations in the
observed in the first half of 2024. changing landscape.

16
 Growth Drivers and Opportunities

GROWTH DRIVERS

17
IT sector to be driven by strong demand and Indian expertise

1. Combat Cyber-security
5. Policy support
• The Data Security Council of India (DSCI)
•
- National Center of Excellence for Cyber
Security Technology Development (NCoE)
5 More liberal system for raising capital,
seed money and ease of doing business.
and Chitkara University have collaborated 1 • Government of India launched IndiaAI
to undertake joint programmes on cyber Mission in March 2024, with an initial
security and privacy. outlay of Rs. 10,300 crore (US$ 1.2
• In April 2022, the Indian Computer billion) to bolster Indi’s AI ecosystem..
Emergency Response Team (CERT-In) Growth • The government introduced the STP
issued directions to strengthen the Drivers Scheme, which is a 100% export-
cybersecurity in the country. oriented scheme for the development
2 4 and export of computer software,
including export of professional services
using communication links or physical
media.
2. Talent pool • Tax holidays for STPI and SEZs.
• India will need over 30 million digitally 3
skilled professionals by 2026.
• According to a NASSCOM report, India
ranks first in AI skill penetration and talent 3. Public cloud market 4. Infrastructure
concentration and fifth in AI scientific
publications. • The revenue of India’s public cloud services market • Infrastructure software revenue in India
totalled US$ 6.2 billion in 2022, and it is expected to was forecasted to reach US$ 4.6 billion
• According to a report published by in 2021, an increase of 12% YoY, driven
reach US$ 17.8 billion by 2027 growing at a CAGR of
Microsoft, consultancy firm Bain & Co, and by rising demand for security-as-a-
23.4%.
industry body Internet and Mobile
• Comparing to prepandemic level from FY2019, the service offerings, and detection and
Association of India (IAMAI), India response capabilities.
cloud deals in FY23 have grown by more than 4 times.
produces 16% of the entire world’s AI
Cloud’s potential is boundless, and it forms a crucial
talent pool – the third highest in the world.
foundation for successful digital transformation.

Note: STPI stands for Software Technology Park of India, SEZ stands for Special Economic Zone
Source: Nasscom, News Articles

18
Exports to remain robust as global IT industry maintains growth

▪ As an estimate, India’s IT export revenue rose by 3.3% YoY in constant currency to US$ 199 billion in FY24.
▪ Export revenue from the industry grew at a CAGR of 6.75% to US$ 199 billion in FY24 from US$ 126 billion in FY18.

Export revenue from IT industry (US$ billion)

250

CAGR 6.75%

200
194 199

178
150
147 151
136
126
100

50

0
FY18 FY19 FY20 FY21 FY22 FY23 FY24

Source: Nasscom, Media Sources

19
Accelerating demand for cloud to be a major growth driver

▪ With digital transformation accelerating across sectors, the pandemic

has driven demand for cloud services worldwide, and the Internet has India data centre market investment (US$ billion)
become a lifeline for people both for work and entertainment. This
move towards cloud services has accelerated hyper-scale data centre 12
investments, with global investments estimated to exceed US$ 200
billion per year by 2025.
10
▪ India has emerged as the second fastest-growing data center market in
the Asia-Pacific region, experiencing a notable 28% increase in 6-8
capacity. 8
▪ India’s data centre market is expected to reach a value of US$ 9.96
billion by 2028 from US$ 5.42 billion in 2022, growing at a CAGR of
10.69% 6

▪ Reliance Industries is set to build the world’s largest data center in 9.96
Jamnagar, Gujarat, marking a major step in its entry into India's artificial 4
intelligence (AI) sector.
5.42 6
▪ India's data center industry is rapidly expanding, projected to double its
2
capacity from 0.9 GW in 2023 to nearly 2 GW by 2026. 3.4
▪ The demand for cloud technology professionals is expected to reach 2
million by 2025. 0
▪ The cumulative investments in data centres in India are estimated to FY19 FY22 FY25E FY28E
reach U$ 28 billion between 2019-25, at a CAGR of 5%, 2x faster than
the global average. ▪ In November 2022, Google established a partnership with local
▪ The COVID-19 pandemic has accelerated the demand for third-party gaming startup SuperGaming through its Google Cloud division. As
data centre services in India. part of the collaboration, game developers who use Google Cloud to
▪ The key data centre locations are Mumbai, Chennai, Bangalore, create, host, and distribute their games will have access to
Hyderabad and Delhi (NCR). SuperGaming's SuperPlatform game engine.
▪ In November 2022, Amazon Web Services announced the launch of its ▪ Amazon partnered with Airtel to sell Amazon Web Services (AWS) to
second AWS infrastructure region in India - the AWS Asia Pacific its customers and intends to inject US$ 1.6 billion in their two
(Hyderabad) Region. By 2030, it is anticipated that the region will upcoming data centres in Hyderabad.
support more than 48,000 full-time jobs annually thanks to investments
totalling more than US$ 4.4 billion in India.

Note: E - Estimated
Source: Nasscom, IDC, Media Sources

20
Indian talent pool ready to take IT sector to the next level

▪ The BPM sector in India employed >1.4 million people, while IT and Demand for freshers across industries (growth over the
BPM together had 5.4 million workers, as of FY23. previous year, in %)
▪ As per a recent report from NASSCOM, India had one of the world’s
largest annual supplies of STEM graduates, at 2.5 million, also 50
achieving a globally leading female diversity ratio of 43-48% in 2022- 45
23. 40
▪ The report further states that India has the lowest tech talent demand 35
23 24 25 22
supply gap at 25%-27% among global tech leaders such as the USA, 30 25
UK, Canada, and Australia. 25 17 17
▪ However, based on the cautionary demand environment, companies 12 13
20
have been focusing on enhancing utilization and shifting to a more 15
just-in-time hiring model. NASSCOM expects hiring in the tech sector 10 20 20 20 21
to be 60,000 net employees in FY24, 16 15 15 15 16
5
▪ Compared to the number of freshers demanded by industries in
0
2021, in 2022 the demand for talent rose to 21.13% from around
18% in 2021.
▪ India BPO promotion scheme was approved under the Digital India
program. It aims to create employment opportunities for the youth
and promote investments in the IT & BPM industry. Under the
scheme, employment has already been created for more than 10,000
individuals.

Fresher Hiring in 2021 Expected Fresher Hiring in 2022

Source: Nasscom, Everest Group

21
SEZs to drive IT sector; tier II cities emerge as new centres

▪ IT-SEZs have been initiated with an aim to create zones that lead to
infrastructural development, exports and employment.
Parameters STPI SEZ
▪ As of November 2021, there were 425 approved SEZs across the
Term ▪ 10 years ▪ 15 years
country, and of these, 276 were from IT & ITeS and 145 were
exporting SEZs. ▪ 100% tax holiday on
▪ 100% tax holiday on
exports for first 5
▪ Over 50 cities already have the basic infrastructure and human export profits
years
resources to support the global sourcing and business services Fiscal benefits ▪ Exemption from
industry. Some cities are expected to emerge as regional hubs ▪ Exemption from
excise duties and
supporting domestic companies. excise duties and
customs
customs
▪ Software Technology Parks of India (STPI) has set up 65 centres
▪ No location ▪ Restricted to
across the country to provide single window clearance and
infrastructure facilities. STPI units can avail excise duty exemptions Location and constraints prescribed zones
size restrictions ▪ 23% STPI units in with a minimum area
on procurement of indigenously manufactured goods. Notably 57
centres are in Tier-II/III cities. tier II and III cities of 25 acres

▪ In June 2022, STPI Director General Mr. Arvind Kumar stated that
exports through STPI units have increased from Rs. 17 crore (US$
2.14 million) in FY92 to Rs. 5.69 lakh crore (US$ 71.65 billion) in
FY22.
▪ In October 2021, STPI FinBlue in Chennai selected 20 start-ups
from the FinTech domain including trading, banking and lending to
explore cross-border collaboration. It has signed an MoU with
ASEAN Financial Innovation Network Ltd.
▪ In October 2021, the STPI and Society for Innovation &
Entrepreneurship, IIT Bombay, signed an MoU to strengthen the
start-up ecosystem by leveraging the latter’s expertise and
knowledge.
Note: SEZ - Special Economic Zone, STPI (Software Technology Parks of India)
Source: EY, Nasscom

22
Impressive growth prospects sustain PE and VC interest

▪ India’s BFSI and fintech sectors have seen a resurgence in interest, PE investments in IT & BPM (US$ billion)
with deals worth over US$ 5 billion and US$ 4 billion, respectively, in
2022. Together, they account for 18% of the country’s PE-VC 25.0
investments, driven with growth in overall outstanding credit, which

23.4
has doubled since 2014 to reach US$ 2 trillion
20.0
▪ In 2022, PE Investments in IT and BPM industry almost halved to
US$ 12.3 billion as against US$ 23.4 in 2021.
▪ India’s IT startup ecosystem received record investments of nearly 15.0
US$ 36 billion in privately held companies in 2021, up from US$ 11

12.4

12.3
billion in 2020. 10.0
▪ Baring Private Equity Asia (BPEA) planned to acquire a 30% stake in

7.5
NIIT technologies Ltd. for Rs. 2,627 crore (US$ 375.88 million).
5.0
▪ TCS made significant investments in building intellectual property in
the digital assurance domain.
0.0
▪ In March 2022, Licious, India’s largest tech-first, fresh animal protein

2019

2020

2021

2022
brand, raised US$ 150 million in a Series F2 funding round..
▪ In March 2022, debt marketplace CredAvenue raised US$ 137 million
in a funding round led by Insight Partners, B Capital Group and
Dragoneer Investment Group, which propelled the startup’s valuation
to US$ 1.3 billion.
▪ In February 2022, Hasura, a software company which helps
developers with tools, raised US$ 100 million in a fresh funding round
led by Greenoaks Capital, which elevates the company into a
unicorn.

Source: The Indian Private Equity and Venture Capital Association

23
Newer geographies and verticals provide huge opportunities

1. New vertical
Non-linear growth due to platforms,
products and automation.
Emerging verticals (retail, healthcare,
utilities) are driving growth.
1

3. Legacy
2 3 modernization
2. New geographies As per TCS Survey Results (February
2021), more than 70% CXOs of global
BRIC nations, continental Europe, companies considered mainframe or
Canada and Japan have IT spending legacy modernisation a strategic
of approximately US$ 380-420 billion. business priority for the next 3 years
Adoption of technology and (FY21-23).
outsourcing is expected to make Asia
the second largest IT market by 2023.

Source: International Data Corporation (IDC), Nasscom

24
Expansion of focus areas to aid future growth… (1/2)

▪ The Cabinet approved an allocation of over Rs. 10,300 crore (US$ 1.2
billion) for the IndiaAI Mission, marking a significant step towards Market size of other progressing verticals by 2020 (US$ billion)
bolstering India’s AI ecosystem. This substantial financial infusion,
slated over the next 5 years, is poised to catalyse various components 0 100 200 300 400
of the IndiaAI Mission, including pivotal initiatives like the IndiaAI
Compute Capacity, IndiaAI Innovation Centre (IAIC), IndiaAI Datasets
Platform, IndiaAI Application Development Initiative, IndiaAI

Media*
FutureSkills, IndiaAI Startup Financing, and Safe & Trusted AI. A 24
cornerstone of this effort is the IndiaAI Compute Capacity, envisioned to
erect a cutting-edge, scalable AI computing infrastructure by deploying
over 10,000 Graphics Processing Units (GPUs) through strategic
public-private collaborations.

Utilities
▪ India and France emphasized democratized AI access, ethical
deployment, and cross-border collaboration in AI governance at the 25
AI Action Summit in Paris.
▪ The government has approved the procurement of 19,000 GPUs to

Government Healthcare**
build AI data centers and foundational AI models, exceeding the initial
target of 10,000 GPUs.
▪ The government has also announced the establishment of five National 372
Centres of Excellence for Skilling, focused on training professionals in
AI, automation, and advanced IT technologies.
▪ Technologies, such as telemedicine, health, remote monitoring
solutions and clinical information systems, would continue to boost
demand for IT services across the globe. 90
• IT sophistication in the utilities segment and the need for
standardisation of the process are expected to drive demand.
▪ Digitisation of content and increased connectivity is leading to a rise in
IT adoption by the media.
SMB

250
▪ RBI is executing a plan to reduce online transaction costs to encourage
digital banking in India.
▪ The rollout of fifth-generation (5G) wireless technology by
telecommunication companies is expected to bring at least US$ 10
billion global business to Indian IT firms by 2019-25.

Note: **as estimated in 2023, *as of 2022

Source: Nasscom, Gartner

25
Expansion of focus areas to aid future growth… (2/2)

▪ Emerging geographies would drive the next phase of growth for IT firms in India.

▪ AI and new-age tech to increase India's annual growth rate by 1.3% by 2035.

▪ Focus on building local credible presence, high degree of domain expertise at competitive costs and attaining operational excellence hold key to
success in new geographies.

▪ Emphasis on export of IT services to current importers of other products and services.

Countries offering growth potential to IT firms

Country IT spend India’s penetration Key segments

Canada US$ 63 billion ~1.5% Enterprise applications, cyber security, healthcare IT

Europe US$ 230 billion <1.5% IT sourcing, BPM, IS outsourcing, CAD

Japan US$ 235 billion <1% CRM, ERP, Salesforce automation, SI

Spain US$ 26 billion <1.5% IT sourcing, SI

Mexico US$ 29 billion ~4% IT sourcing, BPM

Brazil US$ 47 billion ~2% Low level application management, artificial intelligence, R D

China US$ 105 billion <1% Software outsourcing, R&D

Australia US$ 48 billion ~4% Procurement outsourcing, infrastructure software and CAD

Source: Nasscom

26
Key Industry Contacts

27
Key Industry Contacts

Agency Contact Information

Electronics Niketan, 6, CGO Complex,

Lodhi Road, New Delhi - 110 003
Ministry of Electronics and Information Phone: 91 11 2436 9191
Technology (MeitY) Fax: 91 11 2436 2626
E-mail: mljoffice@gov.in
Website: www.meity.gov.in/
155, Okhla Phase III, Okhla Industrial Area, New Delhi, Delhi -
110 020
Electronics and Software Exports Promotion
Phone: 91 11 4748 0000
Council (ESC)
E-mail: info@escindia.com
Website: www.escindia.in/

International Youth Centre Teen Murti Marg, Chanakyapuri,

New Delhi - 110 021
National Association of Software and Phone: 91 11 2301 0199
Services Companies (NASSCOM) Fax: 91 11 2301 5452
E-mail: info@nasscom.in
Website: www.nasscom.in

Ninth Floor, NDCC-II,Jai Singh Road (Opposite Jantar Mantar),

New Delhi - 110 001
Software Technology Parks of India Phone: 91 11 2343 8188
Fax: 91 11 2343 8173
Website: www.stpi.in

28
Appendix

29
Glossary

▪ APAC: Asia Pacific

▪ BFSI: Banking, Financial Services and Insurance
▪ BPM: Business Process Outsourcing
▪ CAGR: Compounded Annual Growth Rate
▪ C U: Construction and Utilities
▪ FDI: Foreign Direct Investment
▪ GOI: Government of India
▪ IT & ITeS: Information Technology-Information Technology Enabled Services
▪ NAC: Nasscom Assessment of Competence
▪ RoI: Return on Investment
▪ ROW: Rest of the World
▪ Rs.: Indian Rupee
▪ SEZ: Special Economic Zone
▪ SMB: Small and Medium Businesses
▪ STPI: Software Technology Parks of India
▪ T M: Telecom and Media
▪ T T: Travel and Transport
▪ US$ : US Dollar
▪ UT: Union Territory
▪ Wherever applicable, numbers have been rounded off to the nearest whole number

30
Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$

2004-05 44.95 2006 45.33

2005-06 44.28 2007 41.29
2006-07 45.29
2008 43.42
2007-08 40.24
2009 48.35
2008-09 45.91
2010 45.74
2009-10 47.42
2011 46.67
2010-11 45.58
2011-12 2012 53.49
47.95
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09
2017 65.12
2017-18 64.45
2018 68.36
2018-19 69.89
2019 69.89
2019-20 70.49
2020 74.18
2020-21 73.20 2021 73.93
2021-22 74.42 2022 79.82
2022-23 78.60 2023 82.61
2023-24 82.80 2024 84.49
2024-25** 85.34 2025* 86.20

Note: *- Until January 2025, **- April 2024- January 2025

Source: Foreign Exchange Dealers’ Association of India

31
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