India IT Market

Semiconductors (Indian market)

Main Article: Semiconductors (Indian Market)

Digitalization of India's public sector

Main Article: IT in India's Public Sector

Export of computer equipment and IT services

Main article: Export of computer equipment and IT services from India

Smartphones (Indian market)

Main article: Smartphones (Indian market)

Digital India

Main article: Digital India

2024: Indian IT market growth 3.8% to $254 billion

At the end of 2024, the volume of the Indian IT market reached $254 billion. This is 3.8% more compared to 2023, when the figure was estimated at $244.7 billion. The share of IT is at the level of 7.4% of the country's GDP, as stated in materials published in mid-December 2024.

According to the trade representative of the Russian Federation in India, Alexander Rybas, the population of India is 1.44 billion people, and in terms of GDP ($3.7 trillion), the country ranks fifth in the world. The number of Internet users in India as of 2024 exceeds 692 million people, the number of owners of smartphones and mobile phones - 1.14 billion. It is expected that in 2025 the size of the local Internet audience will reach 900 million users.

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India is interested in technological cooperation and in the development of technologies on its territory, including together with other countries. It seeks technological sovereignty. At the same time, the main emphasis is on production and development in India (the state program Make in India) with a priority on the digitalization of industry and management, says Oksana Agafonova, "digital attaché" of the Russian Trade Mission in India.

In general, as noted, the IT market in India is very competitive. It presents almost all global IT companies, the work with which is coordinated by various associations and chambers of commerce and industry. In the future, the market will continue to show steady positive dynamics. It is assumed that by 2030 the volume of the Indian IT industry will reach approximately $1 trillion. At the same time, the share of IT in the country's GDP may increase to 25%. The Government of India under the Ministry of Industry and Trade has set up Invest India to attract investment in the economy as well as to support foreign companies intending to implement projects in the country.^[1]

2023

Market growth by 6% to $14.5 billion

In 2023, the volume of the Indian market for IT and business services reached $14.5 billion, which corresponds to an increase of 6.1% on an annualized basis. For comparison, in 2022, the pace of expansion of the industry was higher - approximately 7.4%. Such indicators are given in the IDC study, the results of which were published on June 24, 2024.

The slowdown is explained by the fact that Indian enterprises are cautiously approaching costs in the IT sector due to unstable macroeconomic conditions. The companies focused on cost optimization, prioritizing faster payback projects. Businesses continued to invest in areas such as improving customer experience and improving operational efficiency. Technologies artificial intelligence and, machine learning data analytics tools cloudy and services help to gain a competitive advantage.

In the total volume of the considered Indian market in 2023, IT services accounted for 78.4% of costs, or approximately $11.4 billion. Year-on-year growth was recorded at 6.6%, while in 2022 an increase of about 8.1% was demonstrated. In general, IDC divides the industry into three main areas: design-oriented services, managed services and support services. In 2023, the highest growth rates were noted in the first of the named segments - plus 6.8% year-on-year. In the other two categories, growth was 5.8% and 5.2%, respectively.

According to analysts, in the period from 2023 to 2028, the IT and business services market in India will demonstrate a CAGR (compound percentage CAGR) of 7.3%. As a result, as noted in the study, by the end of 2028, costs may increase to $20.7 billion.^[2]

32 electronics manufacturers agree to open factories in India after PC import ban

At the end of August 2023, information appeared that at least 32 manufacturers of electronics and computer equipment agreed to localize production in India in response to new requirements of the authorities.

On August 3, 2023, the General Directorate of Foreign Trade of India limited the import of laptops, desktops, tablets, servers and other equipment into the country. The measure is designed to stimulate the development of the local IT industry. As a result, foreign companies wishing to continue selling their equipment on the Indian market are forced to open factories in this country.

32 electronics and computer manufacturers agree to localize production

According to Bloomberg, the Indian authorities intend to allocate $2.1 billion to subsidize the localization of the production of computers and server equipment. At the same time, companies can count on a return of 5% of the cost of each device produced at Indian enterprises.

It is noted that the companies that have applied for the production of laptops and other products in India include Hewlett Packard Enterprise (HPE), Dell Technologies, Asus, Acer and Lenovo. Apple did not apply for production localization as of the end of August 2023, but such a request came from its main contractor, Hon Hai Precision Industry Co. ( Foxconn ).

The administration of Indian Prime Minister Narendra Modi expects that new enterprises will provide additional investment in the development of the Indian IT industry in the amount of approximately $300 million. And the cost of their products over a six-year period is estimated at more than $40 billion. Companies will be able to start releasing devices under this program in early 2024. At the same time, as they say, not all applicants can get approval to participate in the initiative.^[3]

India bans import of computers and servers

On August 3, 2023, the General Directorate of Foreign Trade of India restricted the import of electronics and computer equipment into the country. The ban applies to laptops, desktops, tablets, servers and other equipment. These measures are designed to stimulate the local production of the listed products. Read more here.

India creates national OS

In mid-January 2023, Indian authorities teamed up with academia and startups to develop a mobile operating system called IndOS. Read more here.

2022

Market growth of 1.9% to $109.6 billion

On November 14, 2022, Gartner published statistics on the Indian information technology market. Total costs reached $109.6 billion, an increase of 1.9% compared to 2021.

The largest segment remains various computer and electronic devices: expenses here amounted to $48.4 billion, but on an annualized basis, a drop of 2.2% was recorded. Communication services accounted for $24.5 billion - plus 0.3% compared to 2021. The IT services sector provided $20.6 billion in revenue, showing an increase of 7.1%. Another $12.6 billion came from software, with the highest annual growth - 12.3%. Data center systems showed an 11.0% increase in revenue to $3.5 billion.

Indian IT market up less than 2% in 2022

Inflation has not affected business spending on technology worldwide, and India is no exception, "said Arup Roy, vice president of analytics at Gartner.

Companies have recognized how the digital transition can benefit them in the long term. Depending on the level of maturity of the enterprise, the context of expenses may differ for different businesses, but the total costs in the IT market will continue to grow.

Experts note that Indian companies and organizations need to pay more attention to cybersecurity as digital initiatives develop and mature, otherwise they will face serious business risks. In addition, in 2023, one of the main problems for the IT market in India will remain a shortage of highly qualified specialists in the field of digital technologies. Local business leaders will have to be creative about how they find talent, where they attract people, and how effectively they use these resources.^[4]

The second largest manufacturer of mobile phones in the world

Targeted policies to bring electronics manufacturers into Indian territory have seen the country become the world's second-largest mobile phone maker by the end of 2022.

Chinese companies Xiaomi, Oppo and Vivo are in talks with Indian Lava International and Dixon Technologies in December 2022 about the possibility of contract production of smartphones for delivery to the global market.

Such a scheme attracts Chinese manufacturers with tax breaks provided by the Indian authorities.

India obliges VPN services to store customer data and hand it over to authorities

On May 2, 2022, it became known that for companies engaged in the provision of virtual private networks (VPN) services, India introduced the obligation to collect extensive data on customers and store them for five years or more, according to the new national directive of the Computer Emergency Response Group (CERT-in). This is a policy that is likely to complicate the lives of both VPN companies and users of their services. Read more here.

EU, India form IT union

On April 26, 2022, Prime Minister Narendra Modi and President of the European Commission Ursula von der Leyen announced the creation of the'Trade to trade and Technology Council' between and - India EU a high-level strategic agreement to solve key trade, economic and technological problems. Previously, this structure was created by the EU only to strengthen relations with. USA Read more. here

2021: Indian IT Services Market Up 7.9%

On April 28, 2022, an IDC study was published, according to which in 2021 the volume of the Indian IT services market reached $14.15 billion and showed an increase of 7.2%, which exceeds the dynamics of 2020 (+ 5.3%). The increase in growth rates is associated with the growth of digital transformation initiatives among enterprises in the country, analysts say.

{{quote 'The surge in digital transformation initiatives among Indian businesses continues into 2021 as businesses continue to increase investment in IT to improve resiliency and efficiency of their business operations and improve customer experience. Clouds, artificial intelligence, machine learning, and IT security remain priority areas of investment, and businesses are also increasing investment in workplace transformation projects as hybrid work models are introduced. As the economy gradually recovers from the effects of the COVID-19 pandemic, there will be an increase in IT services spending in the coming years due to pent-up demand caused by the pandemic, as well as an increase in discretionary IT spending in some industries, said Harish Krishnakumar, senior IT services market analyst at IDC India. }}

India's IT services market up 7.9% for the year

In the structure of the IT market, the share of the IT services market is 77.6%, and in 2021 it grew by 7.9% compared to an increase of 5.8% in 2020. According to IDC, the IT market is expected to witness strong growth in the coming years as businesses continue to invest in areas such as AI/ML, cybersecurity, application upgrades, cloud, etc. According to forecasts, in the period 2021-2026. the IT services market will grow at a growth rate of 8.9% and will reach $21.67 billion by the end of 2026.

IDC divides the IT and business services market into three main markets - design-oriented, managed and support services. In 2021, the highest growth rates were recorded in the segment of design-oriented services - 7.9%, followed by managed services - 6.9% and support services - 6.2%, respectively.

{{quote 'While 2020 has forced businesses to focus on survival and business continuity strategies, Indian businesses continued investing in IT services in 2021 as they accelerated their digital transformation journey. In addition, IT service providers continued to build digital capabilities with development-oriented solutions and platforms. Areas such as cloud and information security, as well as automation and AI continue to gain momentum. We believe this trend will continue as Indian businesses look at their IT service providers as they move towards their goal of becoming an enterprise of the future, "said Shrath Srinivasamurthy, Research Director, IDC India, Corporate Solutions and ICT Practice. }} Application and infrastructure management services continue hosting to show strong growth as many businesses are increasingly moving to cloud and hosting services. There is also an increased demand for system integration services due to initiatives such as application upgrades and the introduction of new technologies such as cloud technologies AI/ML.^[5]

2020

Why Indian IT companies will suffer more than others from COVID-19

In April 2020, it became known that Indian IT companies could suffer from the COVID-19 pandemic more than high-tech companies in other countries. Since they account for a large percentage of projects that are not related to the continuous functioning of the business - that is, those that can be postponed.

In 2019, digital transformation projects, the cancellation of which does not affect business performance, accounted for approximately 30-40% of all projects in the Indian high-tech industry. As a result of the onset of a global recession, the share of such projects may fall to 5-20%, HDFC Securities predicts.

Indian IT companies could suffer more from COVID-19 pandemic than high-tech companies in other countries

Indian IT companies that will be hit hardest by this downturn include giants such as Infosys and Wipro, as well as smaller Mindtree and Hexaware.

Thus, Infosys revenue for the period from October to December 2019 by 41% consisted of outsourcing IT services, and Wipro - by 40%.

If you are engaged in projects for customers in the field of air transportation, hospitality and other industries most affected by the pandemic - and in India there are most companies with such customers - you will have a major blow, writes CNet.

However, it is not planned to postpone costs for all projects - for those that can bring instant benefits, customers will continue to allocate funds. These include process automation, cloud migration, and information processing projects using artificial intelligence.

The problem also lies in the fact that for these projects about 60% of customers have already begun to demand significant discounts - from 20% to 50%. Customers are also asking for delayed payments for work completed for several months, which could also have a negative impact on the Indian IT industry.^[6][7]

India allocated $1.12 billion for the development of quantum computers

In early February 2020, the Indian government approved its budget for 2020, allocating about $1.12 billion for the development of quantum computers. These funds will go to the development of the National Program on Quantum Technologies and Applications.

Officials emphasized the importance of emerging technologies within the so-called "new economy" based on innovations that destroy established business models -, artificial intelligence (AI)| IoT[[Internet things Internet of Things (IoT) |[[Internet of Things (IoT)|Internet of Things (IoT)]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]],, 3D printing drones DNA data storage, and. quantum computing The government India believes that it has already begun to successfully use new technologies, ensuring direct advantages and financial inclusion on a scale that the country previously could not imagine.

The Government of India approved its budget for 2020, allocating about $1.12 billion for the development of quantum computers

The Indian government also plans to introduce laws that will allow the private sector to build data centres across the country. The finance minister claims this will allow local firms to turn on data processing at all stages of the value chain. In addition, all "community facilities," including health centres, public schools, aid distribution points, post offices and police stations, will be provided with digital technology and connectivity. Almost $1 billion is planned to be allocated for the program in 2020-2021.

Especially for startups, the government intends to develop a digital platform that will make it easy to register and protect intellectual property rights. An Institute of Excellence will also be established, which India's finance minister said will "work on intellectual property innovation." The government has also proposed setting up a fund to support start-ups in the early stages.^[8]

2019

Indian tech companies raise record $14.5 billion in investments for the year

Indian tech startups raised $14.5 billion in investments in 2019, surpassing the 2018 record of $10.6 billion. This is evidenced by the data of the venture capital company InnoVen Capital, which were released at the end of December 2019.

In 2019, Indian tech start-ups participated in 1,185 funding rounds with 817 investors. Startups that barely appeared on the market raised $6.9 billion, which is much higher than last year's figure ($3.3 billion). The number of deals of start-up startups increased by 22% compared to 2018.

Indian tech startups raise $14.5 billion in 2019 investment, surpassing 2018 record of $10.6 billion

In general, Indian technology companies entered into 81 transactions in the amount of $25 million to $100 million, while in 2018 the number of such transactions amounted to only 56, and in 2017 - 36. In 27 rounds, companies raised over $100 million; in 2018, the number of such rounds was 17, and in 2017 only 9, reports TechCrunch.

In 2019, 128 tech startups were acquired in India. Nine developers have a total capital of more than $1 billion. In 2019, Indian tech startups also attracted a record number of international investors.

Over the past ten years, investments attracted by Indian startups have grown 25 times - from $550 million in 2010 to $14.5 billion in 2019, Tracxn analysts said.

In 2014 and 2015, startups were mainly focused on building e-commerce solutions and replicating ideas that worked in Western markets. However, by 2020, they began to explore new opportunities and develop solutions that had not previously been applied in other markets.

Analysis by Tracxn showed that the largest funds in 2019 were attracted by startups related to housing - about $1.7 billion, as well as logistics startups such as Elastic Run, Delivery and Ecom Express - $641 million.^[9]

India launches national blockchain program

In late November 2019, India's Minister of Electronics and Information Technology Sanjay Dhotre announced the launch of a national blockchain deployment program in the country. It is intended for widespread adoption of the technology in all industries. More [[blockchain} here|blockchain} here]].

India launches world's largest facial recognition system

In late October 2019 India , the government announced plans to launch the world's largest. facial recognition system According to the project, the police of 29 states of the country and seven union territories will have access to a single centralized database that will facilitate the search for criminals and missing people. More. here

Net 4 India Suspension Over Debt

On June 11, 2019, it became known that the court India found the company insolvent. Net 4 India As of the to data end of February 2019, more than 100 thousand domain names were under its management (mainly in the.COM zone and other "old" common top-level domains). At the same time, the number of company-managed names has been steadily decreasing lately. More. here

2018

Internet penetration compared to other countries

2018

Proportion of residents without a smartphone

Share of residents of countries without a smartphone, 2018

The volume of IT contracts extended for 2018 in India was estimated at $50 billion

In January 2018, the analytical company Everest Group published the results of a study of the Indian IT market. The subject of close attention of experts were extended contracts.

The Everest Group counted about 196 IT transactions worth more than $100 million each, which Indian companies (including local subsidiaries of international corporations) previously concluded with Indian or foreign integrators, and in 2018 these contracts were extended. The total volume of such transactions for 2018 exceeds $50 billion.

According to researchers, by the beginning of 2018, 12 orders worth several billion dollars were taking place in the Indian IT market. The largest among them is the agreement between the Indian subsidiary Siemens and the French IT service provider Atos.

In second place is the cooperation of Citigroup Bank with IT outsourcer TATA Consultancy Services (TCS) for $2.5 billion. The top three leaders included the deal of the oil and gas giant Royal Dutch Shell and the Indian representative office of AT&T - $1.5 billion. Other large IT contracts in the country are presented in the table below.

IT contracts filed in 2018

Extended multibillion-dollar contracts, among other things, involve the transfer of IT infrastructure to the cloud, the provision of business processes as a service (BPaaS) and integrated projects (application development and support, analysis, etc.).

It is noted that among 196 transactions, only four main integrators are Indian companies. True, they may be present as secondary partners in other contracts. The fact is that many large orders are divided into several small ones, thanks to which Indian suppliers get a great chance to participate in the deal, analysts say.

In 2016, research firm ISG conducted a survey showing that many customers (66%) prefer to renew contracts with previous performers. 32% of companies after the expiration of the contract transferred part of the orders to new suppliers.^[10]

2017: Indian IT companies conspire for low paychecks for programmers

Major Indian IT companies, including Infosys, have formed a cartel to keep the salaries of aspiring engineers low, said IT industry veteran former Infosys CFO Mohandas Pai.

He confirmed the words of the co-founder of Infosys BSE Narayana Murthy, who said that from 2010 to 2017, the salaries of newcomers in the software industry remain at the same level, while for senior employees they have grown several times.

iGate India Bangalore Office

Mohandas Pai believes that companies are abusing the "overabundance" of software engineers and trying to control the market in this way.

I know that people (from large IT companies) got together and told each other not to raise the salaries of novice employees. If we take into account inflation, then the remuneration of newcomers to the IT industry actually decreased by 50% in the period 2010-2017. Therefore, the decline in the labor force in the first five years is very high, because it is important for people to receive a decent salary and live with dignity. Pai said.

In his opinion, the stagnant level of initial salaries has led to the fact that talented workers do not go to the IT industry, although large companies have every opportunity to pay a higher salary even to novice specialists. In addition, the education received is often not enough for employees to be immediately hired in the IT industry, so companies have to additionally train them, which is why they motivate the consistently low salary level of newcomers.

Mohandas Pai believes that if large IT companies continue to pursue such a policy, they will inevitably become training grounds for other companies hiring only experienced workers to save on employee training. And first of all, this order of things will be unprofitable for the IT corporations themselves.^[11]

2014: Software market in India reaches $4 billion (+ 8%)

The software market in India reached $4 billion in 2014, up 8.3% from a year earlier. This was announced by Gartner^[12].

Among vendors in first place in India was Microsoft with a share of 25% (the corporation's revenue for the year amounted to $1.018 billion). In general, the three main software vendors - Microsoft, Oracle (13%, $516.7 million) and IBM (12%, $475.3 million) - occupied more than 50% of the market in India. In fourth and fifth places are SAP with 8% ($317.4 million) and VMware with 3% ($105.3 million).

As for the state IT strategy, India's plans imply the creation of Digital India e-government, the development of "smart cities," and a focus on the development of broadband access in order to increase the scale of IT use in the country.

2012

In India, build their own Skolkovo

Even three decades after the founding of Infosys, one of the world's largest IT service providers, the Indian government has not been able to create favorable conditions for nurturing the first generation of IT entrepreneurs.

A new project of the Indian government called Startup ^[13]/( literally - "Village of Startups") is designed to change this situation, this is a startup incubator where it is planned to "grow" 1,000 Internet and mobile companies in the next 10 years, said project mentor and co-founder of Infosys Chris Gopalakrishnan (Kris Gopalakrishnan).

However, critics of the project believe that the launch of the "IT village" will not solve the problem at the root, since there are other difficulties for the development of innovative entrepreneurship in India. For example, the lack of conditions for innovation and the lack of investors due to which the maturation of startups in the third largest market in Asia, which is India, is hampered. India currently ranks 74 out of 79 in the Global Entrepreneurship and Development Index, making it one of the worst places to start a new business.

About 150 startups receive venture capital investments or angel business in India per year, and in the United States about 60 thousand projects are invested by angel business in the early stages. India wants to fix this situation with Startup Village

According to a World Bank report, starting a new business compared to India is much easier even in Pakistan and Nepal, since any ordinary actions, such as getting a line of electricity or a loan from a bank at their disposal, in India are associated with a lot of paperwork and time loss.

At the same time, immigrants from India are one of the most successful ethnic groups among those who came to permanent residence in the United States, they account for, in particular, the maximum number of technology startups among other nationalities. But in India itself until now, the creation of a Silicon Valley-type community has been impossible.

7 months have passed since the launch of Startup Village (as of December 2012), the incubator is located in the city of Kochi. Entrepreneurs within the framework of the project are provided with a working space at a price of about 1/10 of the market price, as well as high-speed Internet access, legal assistance and assistance in matters of intellectual property protection. Plus access to investors.

The construction of the village has not yet been completed, but the first 68 representatives of startups have already been located in two buildings. The total area of ​ ​ the village will be about 10 thousand square meters, work on the territory of the complex is planned to be completed by 2014.

About 120 business incubators are already operating in India, but they are mainly located on the basis of academic institutions and do not have strong ties with the private sector. Startup Village is a joint project of private investors and the government of India, in addition, its creators have already managed to establish contacts with companies such as Research in Motion and IBM.

For the construction of the village, it was the state of Kerala that was chosen because of the comparably lower costs compared to the construction of such a complex in New Delhi or Mumbai. In addition, 150 engineering colleges are concentrated in Kerala, which creates favorable conditions for supplying the project with the right number of enthusiasts.

For comparison, at the moment, about 150 startups receive venture capital investments or angel business in India per year, and in the United States about 60 thousand projects are invested by angel business in the early stages. Such data are provided in the report of the Indian government. According to the Microsoft Accelerator database, 700 new technological products are launched in India per year, while in the United States - 14 thousand.

IT spending in the corporate sector $34.76 billion

The spending of Indian enterprises on information technology in all vertical industries in total will reach 1910 billion rupees (about $34.76 billion) in 2012, which is 16.4% more than the same spending in 2011 (1640 billion rupees), according to Gartner. Some of said growth will be driven by the rise of the rupee against the weakened US dollar, but only some. So the average annual growth rate of expenses up to 2016 will be 8-9%.

Derry Finkeldey, an analyst at Gartner, says the business of Indian IT providers continues to grow substantially, with more Indian IT companies entering the international arena. According to him, already 25 Indian companies are included in the Fortune 500 list, their competitiveness is influenced, among other things, by the overall rise of the Indian ICT industry. "The ICT market India will continue to outperform most regional markets in the Asia-Pacific region," he said.

IT Costs Of India's Various Vertical Industries (INR Billion)

Source: Gartner (May 2012)

Government investment in education significantly fuels the development of IT in this area, so that in 2012, organizations' spending formations on IT will demonstrate a maximum growth rate of 18%. The public sector, the financial services sector and the large industry sector also have favorable prospects.

See also

• Economy of India

Notes