IT Industry and Economic Growth
The information technology (IT) industry is a major contributor to the global economy and India’s economic growth. It involves a range of activities, including:
- Services: IT services, IT-enabled services (ITES), and business process outsourcing
- Products: Software and hardware products
- Infrastructure: Developing infrastructure to store, process, and exchange information
The IT industry has been a major contributor to economic growth in India, and is expected to continue to grow in the coming years:
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IT industry growth
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Revenue
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Revenue reached $227 billion in FY22, and is expected to reach $245 billion in FY23
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Spending
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IT spending in India is expected to grow by 11.1% in 2024, reaching $138.6 billion
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Software product industry
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The Indian software product industry is projected to hit $100 billion by 2025
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GDP contribution
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The IT industry is expected to contribute 10% to India’s GDP by 2025
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The IT industry has grown rapidly in India since the economic reform of 1991-92. The IT sector’s growth has been driven by a number of factors, including:
- Global sourcing: The majority of global corporations source IT services from India.
- Government support: India offers tax advantages to IT companies, including a tax holiday of up to 15 years for startups.
- Special Economic Zones (SEZs): SEZs offer 100% income tax exemption for the first five years and 50% exemption for the next five years.
The IT industry is also diversifying the economy.
GDP per capita