Double Digit Revenue Growth for Indian IT
Nasscom expects the industry to grow by $245 billion over the current financial year with a cross currency impact of just two percent
Notwithstanding the global economic slowdown, interest rate hikes, inflation and growing instances of layoffs across North America, India’s technology appears to be heading for a year of robust growth where revenues could grow by $245 billion. This number was thrown up by Nasscom, the industry association of the IT and IT-enabled businesses.
Nasscom released a new report titled “Strategic Review 2023 – Priming for a No Normal” on the sidelines of its Technology & Leadership Forum providing an overview of the industry. It said India’s tech industry would post double digit growth in currency terms, of which cross currency impact would be around 2%.
Revenues grew and so did exports
Per the industry body, the estimated numbers for FY 2023 reflects an incremental net revenue addition of $19 billion over twelve months across segments such as IT services, business process management, software products, R&D and revenues from domestic markets. The report showcased FY 23 as “yet another growth year for the industry…”
These trends were also visible in India’s service export revenues, which Nasscom expects to reach $194 billion, representing a 9.4% growth compared to a year ago. And contrary to earlier fears, this growth is actually spread across all major markets with the US growing at 10.4% and APAC at 10% with BFSI, manufacturing and telecom and hi-tech being key drivers.
Nasscom chairman K Ramanujam said the year was yet another growth year for the industry and created the required impact for the country and all stakeholders. In spite of global headwinds and moderation in demand, the value proposition of a transformation partner for global enterprises remained intact and actually strengthened India’s leadership.
Domestic revenues grew and so did net hiring
The report underscored the value of India’s massive digital infrastructure for driving domestic technology adoption in a big way. Continued investments by the government and enterprises in emerging technologies resulted in the domestic sector creating new propulsion for the industry. Revenues grew 13% in rupee terms in this segment.
Moreover, at a time when the global tech industry has witnessed large scale layoffs, the Indian IT industry remained a net employer with more than 5.4 million jobs of which 290,000 were new ones created in FY2023. Nasscom said 36% of the workforce was digitally skilled and this resulted in India topping the world in skills penetration levels.
Giving a breakdown, the report said India’s AI skills were among the highest in the world while in the AI and MLspace it was second largest. When it came to cloud computing and management skills, the country stood third. In terms of gender ratio, the country boasted two million women in its IT workforce, adding 140,000 new women employees this year.
New normal has been replaced by No Normal
Nasscom president Debjani Ghosh described the current global scenario as a no-normal environment where the industry focus continues to be on investing for growth. “Propelled by forward-looking policies, strong governance, talent and digital trust to ensure accessibility, privacy, security, and reliability, the tech industry in India is on track to accelerate growth to $500 billion n by 2030,” Ghosh said.
India’s emergence as a preferred R&D destination is visible from the number of global capability centers in the country. Over 40% of the total such centers are in India today and more than 65 new ones were added, taking the total to 1570 centers with engineering R&D witnessing a double digit growth of 11% during the year.
An interesting observation in the report relates to tech patents where 60% of India’s total filings related to emerging technologies. The proportion of digital tech in the overall technology basket revenue has also gone up year on year from around 26% in FY20 to 32% in FY23. Analytics, Cloud and Cybersecurity emerged as the fastest growing segments.