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IT-ITES Industry in India: Performance & Contribution towards Exports

REVENUE

Indian IT-ITES industry revenue is estimated at USD 129.5 billion in FY2015-16 as compared to USD 118.8 billion in FY2014-15, registering an increase of around 9.0%. The overall industry’s growth of this sector over the last five years is given in the table below.

IT – ITES Industry Revenue Trends (in USD billion)
Year/ Description
2011-12
2012-13
2013-14
2014-15
2015-16(E)
CAGR % (2011-16)
Exports
68.8
76.5
87.3
97.8
107.8
12.81
Domestic
19.0
19.2
19.0
21.0
21.7
4.64
Total
87.8
95.7
106.3
118.8
129.5
11.16
Source: Nasscom, E: Estimate


IT Industry Revenue in India - Domestic & Exports


EXPORTS

IT-ITES exports is estimated to gross USD 107.8 billion in FY2015-16, growing by 9.0% over FY 2014-15 and contributing nearly 83% of the total IT-ITES revenues (excluding hardware). A combination of solutions around disruptive technologies such as SMAC (Social media, mobility, analytics and cloud), artificial intelligence, embedded systems etc. have become the life-force of the industry.

During FY 2015-16, IT services exports (excludes BPO, Engineering, R&D and Software products) is expected to register an y-o-y growth of over 10.3%, generating exports of USD 61.0 billion, driven by collaboration, communication, business intelligence projects, and integration of SMAC services with traditional offerings. During FY 2015-16, ITES/BPO exports are likely to be USD 24.4 billion with a growth rate of ~8.4% over FY2014-15. Software products and ER&D segment is estimated to generate exports of US$ 22.4 billion in FY 2015-16 with y-o-y growth rate of ~12%. The domain specific solutions focusing on convergence, customization, efficiencies and localization, M2M technology and newer technologies around SMAC are playing a significant role in driving the growth of ER&D and software products. With over 3,100 firms, India is emerging as a hotbed for software products with SMAC and a supportive ecosystem creating successful stories.


Segment wise export Revenue Trends in IT – ITES Industry (in USD billion)
Year/ Segment
2011-12
2012-13
2013-14
2014-15
2015-16(E)
CAGR % (2011-16)
IT Service
39.9
42.9
49.2
55.3
61.0
12.73
ITeS-BPO
15.9
18.3
20.4
22.5
24.4
11.43
Software Products, Engineering Services, R&D
13.0
15.3
17.7
20.0
22.4
14.46
Total IT-ITeS
68.8
76.5
87.3
97.8
107.8
12.81

Source: Nasscom, E: Estimate


Segment wise export Revenue Trends in IT – ITES Industry


IT Services exports accounts for the largest share of 57.76 %; BPO exports contributing 21.62 % followed by ER&D and software products that together account for 20.62%.

IT-BPO Revenue Share (Year 2015-16)
IT-BPO Revenue Share (Year 2015-16)


DOMESTIC MARKET

Domestic IT-ITES revenue (excluding hardware) is estimated to reach INR 1408 billion in FY2015-16, as compared to INR 1289 billion in FY2014-15, a y-o-y growth of ~9.22%. During FY2014-15, domestic IT services growth is likely to be at 9.67% as large enterprises exhibit cautious spending pattern; driven by technology upgrades in BFSI, telecom and State Governments, and compliance of MIS investments. The domestic BPO services growth is estimated at ~8.72% in FY2015-16, driven by demand from select customers reverting to outsourcing business processes, especially from the BFSI, automotive and retail sectors. Domestic software products is estimated at 8.22% due to increased demand for retail, healthcare, education, manufacturing (vertical-specific) and SMAC (Social media, mobility, analytics and cloud) - based solutions.
                                                            
Segment wise Domestic Revenue Trends in IT – ITES Industry (in INR Crores)
Year/ Segment
2011-12
2012-13
2013-14
2014-15
2015-16(E)
CAGR % (2011-16)
IT Service
58907.6
66300
72721.6
81662
89562
12.33
ITeS-BPO
14849.1
17500
19593.8
21490
23364
12.97
Software Products, Engineering Services
18009.6
20500
22468.8
25788
27907
11.91
Total IT-ITeS
91766.4
104700
114784.2
128940
140833
12.35
Source: Nasscom, E: Estimate

Segment wise Domestic Revenue Trends in IT – ITES Industry (in INR Crores)


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