Indian IT BPM services generated $190.5 billion in revenues in FY20, up 7.6 percent from last year according to the Economic Survey 2020-21.
The industry had registered revenue of $177 billion for the year ending March 2019. The industry has grown 102 percent over the last decade and added 18 lakh employees.
The IT BPM industry includes IT services, business process outsourcing, hardware and software products and engineering services.
IT services segment accounted for 50.7 percent of the revenue at $97 billion. The segment accounted for about 52 percent five years ago. At the same time, the share of software products and engineering services has increased from 18.2 percent in FY15 to 21.1 percent in FY20.
While the US continues to the major revenue generator accounts for about 62 percent of the total software exports, European region is one of the key growth regions for the IT companies.
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The survey noted that the recent policy relaxations related to work from home would further help the sector grow in the coming years.
“In 2021, a number of significant structural reforms have been undertaken to drive innovation, technology adoption and efficiency in the IT-BPM sector, including Relaxation of OSP Terms. This would significantly expand access to talent, increase job creation, make India a global hub for digital services and catapult the sector to the next level of growth and innovation,” according to the survey.
Relaxation of the OSP (Other Service Provider) licence would significantly reduce the regulatory compliance on the business process management companies thereby facilitating work from home for thousands of employees.
The sector employs about 50 lakh people.
IT BPM executives shared that the relaxation would help the industry help the 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 few hours.
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. This was in part driven by the accelerated adoption of technology amid the pandemic.For major enterprises, technology adoption was imminent to ensure business continuity and that was reflected in the large deals IT majors signed over the last two quarters. Some of the top IT majors such as Infosys and TCS have said they would return to double digit growth in FY22.