21st century is earmarked as Information Technology driven and India is at the Centre of global attraction and considered as knowledge powerhouse. The IT industry covers IT services, IT-enabled services (ITES), e-commerce (online business), Software and Hardware products. IT based services are indispensable for any organization to increase productivity, ease of doing business, grow efficiently and economically in this competitive world. Information Technology not only contributed to the economic growth of the country but it has also made governance more competent and approachable. It has made access to government services and information easier and inexpensive. Information technology has also made management and delivery of government service – such as health services, Educational information, consumer rights and services etc. more meritoriously with enhancing transparency. The IT industry is backbone for our economy to prosper exponentially and to generate millions of job. Growth in IT sector will push us to grow at par with China in every sector and will help in grabbing global market. This will improve the socio-economic status of Indians.
How IT industry has flourished in last 50+ years?
The exponential growth of IT industry in India in last two decades has changed the perception of whole world about India’s storehouse of knowledge and skills and powered economic growth. The swift advancement within the IT industry and liberalisation policies such as reducing trade barriers and eliminating import duties on technology products by the Government of India are instrumental in the evolution of this industry. Also, various other government initiatives like setting up Software Technology Parks (STP), Export Oriented Units (EOU), Special Economic Zones (SEZ) and foreign direct investment (FDI) have helped this industry in attaining a leading position in the world IT industry.
The IT sector has increased its contribution to India’s GDP from 1.2% in 1998 to almost 10% in 2019.
According to NASSCOM, the sector aggregated revenues 180 US billion dollars in 2019 with export revenue of standing at 99 US billion dollars and domestic revenue 48 US billion dollars, growing by over 13%. As of year 2020, India’s IT workforce accounts for 4.36 million employees. The united states accounts for two-third of India’s IT services exports.
In the present time, when the COVID-19 pandemic has grappled the whole world and economies have been hard hit. Indian IT industry is still showing positive signs and has the pliability to overcome this exceptional catastrophe. It has arisen as a global economic force and a major contributor to the Indian economy in particular and the world in general.
In the last decade, India has emerged as an IT hub for the software companies of the world and Indian software companies have taken prominent positions in the global IT sector. India has become the world’s largest sourcing destination for the IT industry. Online retailing, cloud computing and e-commerce are all contributing to the speedy growth of the IT industry. The rate of growth in the IT sector for 2019-20 is approximately ten percent.
Indian IT industry has grown rapidly with an exponential growth rate after the economic reform of 1991-92. Indian IT companies have set up thousands of centres within Indian and around 80 countries across the world. The majority of global corporations are sourcing IT-ITES from the Indian IT industry, it accounts for approximately 55 percent of the global service sourcing market (US$ 200-250 billion) in 2019-20. The market size (especially export) of the IT industry has grown manifold from approx. 67 billion US dollars in 2008-09 to 191 billion US dollars in 2019-20. The revenue is further expected to grow in the coming years with an accelerating growth rate and expected to reach 350 billion US dollars by 2025. The remarkable feature of India’s IT industry is that along with its expansion in terms of market size it is also incrementally adding a significant share to India’s gross domestic product (GDP) and consequently boosting the growth and development of the country.
India’s digitally skilled pool has grown over the period and accounted for around 75 percent of global digital talent. India’s four large IT companies (TCS, Infosys, Wipro, HCL Tech) have employed more than one million employees. New IT-based technologies such as telemedicine, remote monitoring, etc. are expanding and boosting the demand in the digital economy. The rollout of fifth-generation (5G) communication technology, growing adoption of artificial intelligence, Big Data analytics, cloud computing and the Internet of Things (IoT) will further expand the size of the IT industry in India. As the size of India’s digital economy is increasing, IT companies are establishing their centres in tier II and tier III cities which will further enhance the growth and reduce the existing disparities.
The IT industry has steadily augmented and accelerated the growth of India. This Industry absorbs a large pool of Indian skilled human resources which makes the country a global IT hub. The IT Industry has been instrumental in transforming the whole Indian economic and governance landscape. India’s IT industry is gaining footsteps in new disruptive technologies and will play a leading role in the ongoing fourth industrial revolution globally.
Atmanirbhar Bharat initiative of current government is bringing big change in IT sector. Earlier, Hardware sector was somehow neglected. Now, focus is also on building hardware manufacturing in India. The biggest step is to start manufacturing integrated chips (IC’s) in India, TATA has taken up initiative under aatmanirbhar bharat and first manufacturing plant is being set up in Tamilnadu.
India is expected to have a digital economy of $1 Trillion by 2025
One of the largest electronics markets in the world anticipated reaching $400 bn by 2025
Indian Electronics Manufacturing Service (EMS) Industry is expected to grow 6.5x from $23.5 bn to reach $152 bn by 2025
100% FDI is allowed under the automatic route.
In case of electronics items for defence, FDI up to 49% is allowed under automatic route and beyond 49% through the government approval.
The global electronics market is estimated to be over $2 tn. India’s share in global electronics manufacturing has grown from 1.3% in 2012 to 3.6% in 2019.
India’s technology services industry can achieve $300-350 billion in annual revenue by 2025 if it can exploit the fast-emerging business potential in cloud, artificial intelligence (AI), cybersecurity and other emerging technologies, according to a report by industry body Nasscom and global consulting firm McKinsey .
The report said domestic tech services could accelerate growth by 2-4% over the next five years as industries worldwide continue to see rapid adoption of digitalization to make a faster recovery from the covid-induced disruptions.
Future belongs to India with a great share of work from different parts of the world and placement of indian experts across globe. Central government has initiated a transformation process in education sector. In next few years, last year of a degree course will be treated as R & D year and syllabus is being developed based on latest technological advancements, skills and knowledge. This will surely add value to our graduates not just as job seeker however will be job creators.
Source: https://diplomatist.com/2020/08/29/it-industry-boosting-indias-growth/, A.K. Sirohi