Despite the global economy being in the grip of the Covid-19 pandemic, the Indian information technology (IT) industry is projected to grow its revenue by 2.3% year-on-year to $194 billion in FY21, Nasscom said on Monday. According to the IT industry trade body, revenue from software services exports is pegged to grow 1.9% to $150 billion during the period under review.
Today, the Indian IT industry accounts for 8% of the country's gross domestic product (GDP) while it has a 52% share in services exports. The Nasscom report further pointed out that the IT industry is expected to add over 1.38 lakh new jobs in FY21, taking its total employee base to 44.7 lakh.
“As we look at 2021, while there are positives on the vaccination front and accelerated digitisation across verticals, the technology industry in India is well geared to build on these trends and continue its transformation journey in this re-defined techade,” said Debjani Ghosh, president, Nasscom, in a statement.
Investing in digital continues to rise for the IT industry, with organisations building their capabilities and aligning business models to digital practices. Over the last few years, software-services companies in the country have ramped up their digital service offerings such as artificial intelligence (A.I.), analytics, mobility, the Internet of Things (IoT), automation and cloud computing, as clients push for more transformative services than just cost-saving outsourcing deals.
The Indian domestic market, which is driven by hardware-led demand, continued to show resilience, growing at 3.4% in the year, noted Nasscom. With an increased focus on innovation, India witnessed more than 115,000 tech patents filed by companies in India in the last five years.
“Digital transformation is the topmost priority for global corporations and, in a highly connected world, that will remain largely contactless for an extended period. There are shifts in business models, customer experience, operations, and employee experience. Our CEO survey for 2021 indicates that almost 70% companies expect investment in global technology higher than the previous year,” said U.B. Pravin Rao, chairman, Nasscom, in a statement.
The industry witnessed 146 M&A deals in 2020, of which 90% were digitally focussed.
According to the report, analysts are cautiously optimistic, and technology is expected to drive front-end operations and customer experience. According to Nasscom’s CEO survey, 97% of the top bosses anticipate significantly better global economic growth in 2021 as compared to last year. In terms of hiring, 95% of the CEOs surveyed expect hiring in 2021 to be higher than in 2020. Further, 67% of the CEOs believe the Indian technology industry will grow significantly higher than last year.
Nasscom's CEO survey further added that the industry is warming up to a blended work model. As per the survey, a whopping 70% of respondents said they expect to have a higher prevalence of remote work along with a boost in the gig workforce in 2021.
As the industry looks forward at leaner structures with more flexibility and faster adoption of cloud-based products and services this year, 60% of the CEOs surveyed expect larger digitisation deals in 2021. Also investments are likely to recover in core sectors for the IT industry such as BFSI, retail, and manufacturing.