The Indian IT sector generated revenues of around US$160 billion in 2017. Roughly US$99 billion came from exports, while US$48 billion was generated from the domestic market. And as India continues to grow at a rapid pace, the IT sector is poised to play a major role in helping the country morph into the massive superpower it is projected to be within the next few decades.
The Indian IT sector
The Indian IT industry started in the city of Mumbai in 1967. In 1973, a software export zone was established. This zone accounted for about 80 percent of the country’s software exports during the 1980s.
In the late 1990s, the Indian government removed market restrictions and allowed foreign investment into the country. As a consequence, the contribution made by the IT industry to India’s GDP has grown from only 1.7 percent in 1998 to almost 7.7 percent of GDP today.
As far as the future is concerned, almost all economists and market experts are betting on the Indian IT sector to grow massively in the coming decades, thanks to a large pool of talent and a drive for innovation.
IT Pro Portal reports Takeshi Ebihara of Rebright Partners as saying: “India’s economy now is exactly the same size as China’s ten years ago and follows a similar growth curve. India’s economy will likely surpass Japan’s in several years. While India is still growing, China is slowing down. 33.2 percent of foreign founders in Silicon Valley are Indian, way more than from other countries. 30 percent of Asian unicorns are Indian.”
Google estimates India will have the largest community of developers in the entire world by the end of 2018.
Top IT sectors
HealthTech: In order to take advantage of the US$280 billion projected to be spent on healthcare by India’s population of 1.3 billion people by 2020, Indian startups have raised over US$300 million in funding. Investments in this area are largely going to sectors like health apps and telemedicine. There has also been a large increase in interest in areas like genetic research, wearable health tech, smart diagnostics, and so on.
FinTech: India is a unique place from a financial perspective in that it has a large population that does not have direct access to banks. However, many of these people do have smartphones. And with the rapid digitization of the country, the incorporation of technology into the financial services market is one niche that the Indian IT industry is specifically targeting. There are almost 500 FinTech startups in the country. A good number of them are also looking to exploit Bitcoin and blockchain technology for revolutionizing India’s digital banking sector.
EnterpriseTech: Thanks to a growing economy, many small and medium-sized enterprises in India are integrating technologies like software as a service (SaaS), enterprise resource planning (ERP), and so on in a bid to modernize themselves. And for the Indian IT industry, this is a golden opportunity. The industry is focusing on a wide range of EnterpriseTech, including technology for accounting, employee performance tracking, salary management, etc. The Indian SaaS industry is expected to reach US$1 billion by 2020.
DeepTech: Given that this is still a nascent area, DeepTech is one segment in which the Indian IT industry can become a true innovator. The niche covers sectors like artificial intelligence, big data, and so on. Presently, DeepTech generates close to US$2 billion in annual revenues, which is expected to double by 2020.