The year 2020 was tough due to the pandemic, causing sharp declines across industries. However, India’s IT sector was an exception. According to Nasscom Reports, it is expected to grow by 2.3% to $194 billion in the 2020-21 financial year.
Growth in IT Exports and Employment
Nasscom’s reports also mentioned that IT exports would reach $150 billion this year, marking a 1.9% increase from last year. The sector expanded its workforce to 4.4 million, adding 1.3 lakh new employees during the same period.
Breakdown of Growth in IT Services
- IT services grew by 2.7% to $99 billion.
- BPM (Business Process Management) grew by 2.3% to $38 billion.
- Engineering R&D grew slightly by 0.2% to $31 billion.
Contribution to the National Economy
The Indian tech sector contributed 8% to the national GDP. It held a 52% share in services exports and accounted for 50% of total FDI (based on FDI inflows from April to September 2020).
Industry Insights from Nasscom Leaders
“We have added $4 billion to the industry this year. The Indian IT sector continues to be a net hirer, especially in jobs created by new technologies,” said Nasscom president Debjani Ghosh. She added that digital revenue accounted for 28-30% of the industry’s total revenue, or $50-53 billion, growing five times faster than overall services.
Shift Towards Digitization and New Work Models
Nasscom’s report highlighted that companies are now focusing their tech budgets on digitization. “There’s a shift to offshore and work-from-anywhere models post-pandemic,” said Nasscom chief strategy officer Sangeeta Gupta.
She also noted a move towards more outcome-based pricing. The attrition rate dropped by 50% in the second half of 2020 compared to the first half.
Emerging Growth Areas
“Continental Europe and APAC have become strong growth regions in the 2021 fiscal year. BFSI (Banking, Financial Services, and Insurance) and healthcare were key growth sectors,” Gupta added.
Rise in Digitally-Equipped Workforce
The digitally-skilled IT workforce now makes up 26% of the total employee base, up from just 8% three years ago, with many focusing on cloud computing and data analytics.
Emphasis on Digital Transformation
“Digital transformation is the top priority for global corporations, especially in a world that remains largely contactless,” Nasscom Reports concluded.
