India is one of the top destinations for software development today, where IT is one of the fastest growing industry. India holds prominent capabilities in outsourcing IT services to global market since it has strong mix of young and technically trained professionals, especially in the field of app programming and web development, it is leading other countries.
Let us know brief about Indian Economy
The country is expected to witness strong economic growth in 2019, It is the world’s seventh-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The long-term growth perspective of the Indian economy is positive due to its young population, English proficiency, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has followed a different path of development from many other countries.
- A fast-growing population of working age. There are 700 million Indians under the age of 35 and the demographics look good for Indian growth in the next twenty years at least. India is experiencing demographic transition that has increased the share of the working-age population from 58 percent to 64 percent over the last two decades.
- India has a strong legal system and many English-language speakers – this has been a key to attracting inward investment from companies such as those specialising in IT out-sourcing.
- Wage costs are low in India and India has made strides in recent years in closing some of the productivity gap between her and other countries at later stages of development.
- India’s economy has successfully developed highly advanced and attractive clusters of businesses in the technology space – witness the rapid emergence of Bangalore as a hub for global software businesses. External economies of scale have deepened their competitive advantages in many related industries.
Road Ahead
India’s gross domestic product (GDP) is expected to reach US$ 6 trillion by FY27 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms.
India’s revenue receipts are estimated to touch Rs 28-30 trillion (US$ 385-412 billion) by 2019, owing to Government of India’s measures to strengthen infrastructure and reforms like demonetization and Goods and Services Tax (GST).
India is also focusing on renewable sources to generate energy. It is planning to achieve 40 per cent of its energy from non-fossil sources by 2030 which is currently 30 per cent and also have plans to increase its renewable energy capacity from to 175 GW by 2022.
India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers.
IT & ITeS Industry in India
Indian IT-ITeS industry offers cost-effectiveness, great quality, high reliability, speedy deliveries and, above all, the use of state-of-the-art technologies globally. India is one of the most preferred outsourcing destinations due to its disciplined programming style.
Indian IT industry has built up valuable brand equity for itself in the global markets, the reason for this is that there are many software companies in India which trains the new graduates and gives advance exposure to innovative IT services by providing proper training to work professionally in an international market.
Apart from this, India also has the quality of talent that attracts various companies. When it comes to any business quality plays an important role, wherein the programmers from India constantly strive to provide high quality services to its clients, they have in-depth knowledge and they extend logical reasoning while developing various software’s.
Time zone also play an important role when it comes to business, where programmers from India are able to provide the quickest services to the market since Indians work for more hours as compare to other countries in the world . Whatever might be the stream of work or project, Indian programmers are ready to deliver high standards work within the time frame without compromising on the quality of the work ,which has also proven to be an important factor for companies outsourcing from India.
The global sourcing market in India continues to grow at a higher pace compared to the IT-BPM industry. Indian IT’s core competencies and strengths have attracted significant investments from major countries. Indian IT & ITeS companies have set up over 1,000 global delivery centres in about 80 countries across the world. India has become the digital capabilities hub of the world with around 75 per cent of global digital talent present in the country.
Government Initiatives
Some of the major initiatives taken by the government to promote IT and ITeS sector in India are as follows:
- The government has identified Information Technology as one of 12 champion service sectors for which an action plan is being developed. Also, the government has set up a Rs 5,000 crore (US$ 745.82 million) fund for realising the potential of these champion service sectors.
- As a part of Union Budget 2018-19, NITI Aayog is going to set up a national level programme that will enable efforts in AI^ and will help in leveraging AI^ technology for development works in the country.
- In the Interim Budget 2019-20, the Government of India announced plans to launch a national programme on AI* and setting up of a National AI* portal.
- National Policy on Software Products-2019 was passed by the Union Cabinet to develop India as a software product nation.
Advantage India
- By 2020, the Government of India aims to empower at least one person per household with digital literacy skills. For the same, the Government has launched various digital skilling initiatives that are aimed at empowering citizens with the knowhow of using IT and mobile devices.
- By 2022, the IT industry in India is expected to increase employment to about 2 million direct hires and 7.6 million indirect hires.
- In the technology driven startups, India ranks third in the world (4,750 technology start-ups in 2016)
- India has favourable government policy and regulatory support for the electronics & IT industry.
- The industry offers a range of services, from low-end application development to high-end integrated IT solutions across multiple verticals, with a well-developed vendor base.
- The Indian IT & software industry adheres to quality processes and standards, with most companies aligning operations with international standards.
- Software technology parks and special economic zones in India provide an affordable real estate space for IT companies.
Road Ahead
India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. Export revenue of the industry is expected to grow 7-9 per cent year-on-year to US$ 135-137 billion in FY19. The industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion out of the total revenue. , hence when it comes to outsourcing, India is the first choice for global companies.
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