India accounts for 15-17% of the global IT consulting and services market: BCG

To give context, India’s IT services segment is currently a $300 billion sector, contributing 7 percent to the national GDP,

• India's IT services make up 15-17 percent of the global market
• Emerging tech segments in India are growing over 20-40 percent
• Report urges India to focus on semiconductors, AI, and deeptech

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India accounts for nearly 15-17 percent of the global IT consulting and services market. This is almost 83-85 percent of overall India tech market, at a time when other segments such as hyperscalers, semiconductors, deeptech, AI-native offerings and data centres are gearing up to flourish in the country, a Boston Consulting Group report released on February 25 revealed.

According to the report, innovations in these emerging segments will drive the next decade of value creation for the country. These segments are capital intensive, IP-led, R&D-driven, and ecosystem-dependent. They require different capabilities, financing models, policy alignment, and risk appetite.

To give context, India’s IT services segment is currently a $300 billion sector, contributing 7 percent to the national GDP, generating over $200 billion in exports, and directly employing nearly 5.8 million people. However, as compared to the other emerging segments mentioned above that are seeing fast-paced double digit growth globally, Indian IT is growing only 4-6 percent annually.

In comparison, the overall global technology market stands at around $8.4 trillion and continues to grow at high single to double-digit rates across multiple segments. Of the nine major technology segments globally, IT-enabled services account for only around 17 percent of the total global tech revenues or close to $1.5 trillion.

The report in turn argued that India needs to increase its focus on to maturing these other segments too.

Rajiv Gupta, Managing Director and Senior Partner, BCG tells Moneycontrol, “India has done supremely well in the world of IT services. We grew from $0 to $300 billion. We are a market leader by a huge distance compared to any other country. That market leadership position has attracted the best talent in India. I am optimistic that the sharpest brains with the hardest working attitude belong to this industry and they will figure out how to compete.”

He added, “So where the next bunch of energy has to go is beyond IT services – on how to lay in the remaining $7.5 trillion industry where we are nascent. We would like to see a lot of the thinking from government, from academia, from private sector, from media in these areas.

Shavi Gandhi, Partner at BCG said, “Our IT segment is growing by 4 to 6 percent whereas, all the other segments such as semiconductors, hyperscalers, deeptech, AI-first companies are growing by more than 20-40 percent and the valuations of other segments are also growing.”

“We are playing in a market which is not growing as fast as the global tech market,” she added.