ICT Sector

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Indian Information & Communication Technology (ICT) sector is valued at more than USD 400 billion and is one of the iron pillars of the economy. India is the market leader in the IT & Business Process Outsourcing (BPO) industry. Major IT hubs in India include Bangalore, Hyderabad, Pune, Mumbai, Chandigarh, Gurgaon, Noida, etc. Besides software development, testing, and BPO, Indian IT is also scaling up to advanced technologies such as Machine Learning, Internet of Things (IoT), AI, etc.

The Indian telecom sector which includes Mobile Virtual Network Operator (MVNO), infrastructure, handset, broadband internet, telephonic service providers is collectively valued at over USD 200 billion. Like IT, it is also playing a significant role in India’s economic growth and progress. Mobiles telephony currently dominate 98% of the market, while landline phones have the remaining minuscule share of ~ 2%.

India is also the 2nd largest internet market in the world after China. However, It is also believed that whatever has been explored so far is just the tip of the iceberg. The market has much bigger potential. This is one of the reasons major IT giants such as Google, Amazon, Facebook are eyeing India. In July 2020, Google announced to invest USD 10 billion in India. In April, Facebook has bought a 10% stake in Reliance backed Jio following an investment of USD 5.7 billion.

Indian ICT Industry

Analysis

  • Indian IT industry is a crucial node in the global IT & Technology industry. Valued at USD 180 billion, Indian IT export constitute a sizable part of the global IT industry.
  • More than 50% of Indian IT exports constitute services whereas 20% comprise of products. Business process management contributes 19% while the rest consists of hardware. From FY 15 to FY 20, the Indian IT industry has grown at a CAGR of 7.6%. More than two-thirds of FDI in India has been concentrated in the ICT sector, which further underscores the significance of the industry. 100% FDI is allowed under the automatic route in software development, data processing, business consultancy, software testing services, and B2B e-commerce.
  • In the next 5 years, the Indian IT (and ITeS) industry is expected to touch USD 350 billion and is going to be a key enabler in India’s ambition of becoming a USD 1 trillion economy.
  • In the last 25 years, India has witnessed a telecom revolution. India’s telecom market is valued at USD 220 billion with over a billion active mobile users.
  • India has seen explosive growth in the internet market following the Reliance Jio entrance in 2016. Jio pioneered the concept of low-cost data services for Indians. This was also a time, marked by the flux of low-cost smartphones in India, thereby furthering the growth of internet penetration in the country.
  • Currently, the aggregate internet users in India is estimated to be more than 500 million. In 2019, for the first-time rural internet users outnumbered their urban counterpart, thereby bridging the urban-rural divide. The government’s rising focus on digitization of government services and programs such as Digital India also played a vital role in the expansion of the internet in India.

The Future of the

ICT Industry

  • Indian IT sector is well poised for steady growth on the back of heightened global demand for AI & machine learning, cloud-based platforms, remote working software, automation, etc. Similarly, as organizations worldwide have accelerated their push towards digitization, more opportunities will unlock for Indian IT companies.
  • India is expected to deepen its foothold in the global data analytics industry. The analytics industry in India, which was valued at USD 2 billion in 2016, is expected to reach USD 16 billion by 2025, contributing 32% of the global market.
  • The traditional boundaries between technology, telecom, and media will continue to blur. Increasingly telecom companies will focus on developing larger media ecosystems and offer value-added services besides voice & data.
  • The current COVID crisis has chronicled a new era in digital commerce in India. Online commerce would not just be limited to larger metros but also tier 2 & 3 cities and semi-urban corridors. This is one of the major reasons, major global tech giants are pouring in billions of money in India. The growth in e-commerce will also be stemmed by young demographics, as two-thirds of Indians are aged below 35.

How India Watch

can Help

  • India watch can offer customized research that can render a lot of insights into the current ICT market, consumer behavior, pricing strategy, distribution structure, competitive landscape, regulatory framework, & much more. Our tailor-made research can help international & domestic companies to make informed business decisions about their growth and expansion in India.
  • On a retainer basis, we can work as your research partner and offer timely data and insights on the technological landscape of India, current market trends, major policy shifts, etc.
  • We can offer strategic communication services comprising of white papers, corporate presentations, thematic reports, etc.
  • We can offer insights on the latest tenders and other relevant market opportunity assessment
  • We can offer a feasibility study and business plan services for new start-ups and tech-enabled entrepreneurial ventures. It can help companies and investors to test the feasibility of their business idea. Our research services can be useful in fundraising as well.

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