Indian IT-BPM services generated $194 billion in revenue, up 2.26 percent year-on-year, in 2020-21. The sector also added 1.38 lakh employees during the year, according to the Economic Survey 2021-22. The sector reported $190.5 billion in revenues in FY20. The data was based on the IT industry body NASSCOM estimates.
The IT-BPM industry includes IT services, business process outsourcing, hardware and software products and engineering services.
The IT services segment accounted for over 51 percent of the revenue at $99 billion. The segment accounted for about 52 percent five years ago.
“The share of Software & Engineering services in the IT-BPM sector, which was consistently growing each year, saw a slight decline to 20.78 per cent in 2020-21. BPM services share remained same at 19.8 percent, while that of hardware services slightly improved to 8.3 per cent,” the survey said.
The US continues to be the major revenue generator at $92.1 billion, accounting for about 62 percent of the total software exports. This is followed by the UK, which is the second largest export market for the IT-BPM services sector with a share of around 17 percent and revenue of $25.2 billion.
The European region, excluding the UK, and Asia-Pacific account for 11.5 percent and 7.7 percent respectively of the export earnings of India.
Work from home relaxation
The survey noted that the recent policy relaxations related to work from home would further help the sector grow in the coming years. The sector employs about 45 lakh people.
“Last year, the government undertook a major reform of liberalizing the Telecom regulations in the IT-BPO sector. This reform will provide a big stimulus for growth of the IT-BPM industry in India and help in creating more income and employment,” according to the survey.
IT BPM executives shared that the relaxation would help the industry help companies access talent in Tier 2 and Tier 3 cities. This will also aid in accessing the talent pool such as retired people with domain knowledge, women and physically challenged people, who can work remotely for a few hours.
A NASSCOM survey between October and November 2021 to assess the impact of the OSP relaxation noted that 92 percent of the participants stated that the OSP reforms have helped reduce the compliance burden.
IT and the COVID-19 pandemic
The IT sector was one of the biggest gainers during the pandemic. Stock prices of large and mid-tier IT companies doubled since April 2020. It was also one of the first sectors to see the demand recover, driven by the accelerated adoption of technology amid the pandemic.
For major enterprises, technology adoption was imminent to ensure business continuity. The major IT companies have doubled their fresher hiring. TCS, Infosys, Wipro and HCL Tech have said that they are looking at double-digit growth in FY22.