IT industry on the road to becoming $350 bn in revenue terms by 2026

The aspirational target of $350 billion by 2026 also means that the industry will have to maintain growth in the double-digit range of 11-14 per cent

The ambition of turning into a $350-billion industry by 2026 appears to be achievable for the Indian IT sector as it is set to clock a revenue of $227 billion for FY22, according to industry grouping Nasscom.

For FY22, the industry is likely to add $30 billion of incremental revenue, taking the overall growth rate to 15.5 per cent -- the fastest in 11 years. For the IT industry to reach $350 billion by 2026, it will have to maintain growth in the range of 11-14 per cent, Nasscom said.

“Based on the foundation that the industry has built and the foundation that the government is providing us by enabling frameworks, we clearly see the roadmap of being a $350-billion industry by 2026. Our differentiator is not just cost but talent, innovation, inclusion and sustainability. The India narrative is becoming a powerful narrative,” said Debjani Ghosh, president Nasscom.
 

The industry believes FY23 will also be about rapid growth. According to a survey done by Nasscom, almost 70 per cent CXOs expect CY22 to be another growth year driven by digital demand. They believe that almost 60 per cent of end-users will spend 6-8 per cent of their revenues on technology.  “The resilience is evident in the numbers -- $200 billion IT industry size and $150 billion exports, close to half the total exports from India. We would like to continue this momentum and this is one of the key differentiators from the country. Reforms, OSP reforms have been appreciated by the industry; a lot more reforms are in the pipeline, including SEZ exemptions. I request industry participants to suggest more reform ideas. More importantly, the industry has been a net hirer with a 5 million employee base," said Ashwini Vaishnaw, Union IT minister.

The industry has emerged as the biggest hirer in the organised sector. For FY22, so far, it has made 450,000 net new hirings. The women employee base is now 36 per cent of the total pool. As many as 200,000 women have been hired in FY22 alone.

Going ahead, the industry that has emerged resilient after the pandemic crisis wants to leverage the remote working model and suggests the government make the remote working model part of the new SEZ policy, Nasscom said.

The Indian technology industry is set to reach $227 billion in revenue terms in FY22 on the back of double-digit growth across all sectors. The other significant part of this growth has been the domestic market, which has witnessed a huge impetus from the government's focus on creating digital infrastructure, the grouping said.

The domestic revenue of the technology industry is likely to record 1.2x growth over FY19 to reach about $50 billion. E-commerce is likely to see growth of 39 per cent to reach $79 billion in 2021-22.

FY22, according to Nasscom, is a watershed year for the tech industry in India as the digital revenue share stands at 30-32 per cent, recording an incremental revenue of $13 billion -- year-on-year growth of almost 25 per cent.

One of the top concerns for the industry is the talent gap. With the focus now on becoming a $350-billion industry, Nasscom said as companies hire more freshers, it is time they worked closely with institutes as well as industry. Expanding into tier 2 & 3 cities will be a key focus area as they look to bridge the demand-supply talent gap.