The National Association of Software and Services Companies (NASSCOM) today revealed various trends that enabled the Indian IT-BPM industry to clock double-digit growth of 12.3 percent (constant currency terms) in exports and 10 percent in domestic revenues for FY2016. In a press meet addressed by Mr. BVR Mohan Reddy, Chairman, NASSCOM, Mr. C P Gurnani, Vice-Chairman, NASSCOM and Mr. R Chandrashekhar, President, NASSCOM, confluence of digital technologies (cloud, mobility, IOT, social, big data), changing business models, rapidly growing innovative start-up ecosystem, government’s vision of driving digitization, India’s consumer economy were identified as major trends that are spearheading this growth.
Amidst a growth of 0.4 per cent in the global IT-BPM in 2015, the industry is expected to reach an estimated USD 143 billion in FY2016, doubling its revenue over the last six years and crossing the USD 100 billion milestone in export revenues. In addition, E-commerce contributed USD 17 billion revenue boosting digital consumption. India continues to gain market share in the global sourcing sector and emerges as the largest, most diversified and scalable destination.
Mr. BVR Mohan Reddy, Chairman, NASSCOM, said, “Amidst a volatile global economic environment, the industry has been able to set new benchmarks by growing from strength-to-strength and sustaining its double-digit growth. Our industry is going bimodal in today’s diverse landscape, gaining share in both traditional and digital markets and fuelling growth of the industry. Start-ups, ecommerce are the new champions of the industry and I expect these segments to increase their contribution to industry growth in the years to come.”
WAY FORWARD FY2017
With increase in technology spending estimated by global technology analysts, Industry expects the double digit growth story to continue in FY2017. The IT-BPM industry export revenue is expected to grow by 10-12 per cent in FY2017 reaching revenues of USD 119-121 billion. The domestic revenue is expected to grow by 11-13 per cent and achieve revenue of INR 1560-1590 billion in FY2017. The industry is expected to add a net employment around 2 lakh.
With this, the industry is marching steadily on the path to reach USD 350 billion by 2025, with digital revenues spearheading growth.
- IT-BPM export revenues grew by 12.3 per cent (in constant currency) and 10.3% (in reported currency) reaching a total estimated revenue of USD 108 bn with digital solutions business demonstrating 1.5X growth.
- IT-BPM domestic revenues grew at 10% reaching a total of INR 1410 billion driven by increased adoption of digital technology by consumers, ecommerce and start-ups coupled with a technology focused Government growth agenda. The E-Commerce segment also added estimated revenues of INR 1084 billion in FY2016E.
- Industry is hiring at a steady level with greater demand for specialized skill sets. The Indian IT-BPM industry employee base has reached a total of 3.7 million with an addition of 2 lakh employees in FY2016. The Indian IT industry strengthened itself as a global talent powerhouse showcasing diversity, and leadership in digital skills. The industry is now looking for talent from ‘Qualification’ to ‘skill based’ with greater focus on hiring ‘knowledge and expertise’ based talent.
INDIA – STARTUP HUB AND DIGITAL SOLUTIONS PARTNER TO THE WORLD
The industry is continuously building and strengthening its digital solutions capabilities. Digital contributed approximately 13 per cent for the leading technology companies. Further, the industry employed over 250,000 digitally skilled employees. Digital M&A deals also witnessed a spike in volume and value crossing USD 2 billion in FY2016 growing 3 times over last year. Increased emphasis on design, creativity, agility and customer experience will lead India to strengthening its position further and presenting itself as the ideal digital solutions partner to the world.
India’s start-up landscape is now a global success story with young start-ups and unicorns making a difference in high impact areas. With over 4200+ start-ups, India is now the third largest start-up base with over 1200+ start-ups being created every year aided by 4.9 mn worth of funding, over 150 active VC/PEs and over 110 incubators and accelerators.
Mr. C P Gurnani, Vice-Chairman, NASSCOM, added, “Digital is reshaping the technology sector and the industry focus is to understand the full potential of digital technologies and help customers make the best of it. Rise of India’s digital quotient is our key priority for the next few years”.
Mr. R Chandrashekhar, President, NASSCOM, added, that “The need of the hour is for industry to fundamentally transform its business models, solution offerings, organization structure and capabilities to strengthen its market leadership position. Further, going forward, revenue growth alone may not be an adequate indicator of the growing capability and capacity of India’s technology industry and factors such as investment, valuations, digital solutions portfolio, impact etc. would also need to be considered in assessing the industry performance and contribution to the economy.”