India's software industry to touch $30 bn revenue by 2025: Nasscom
India's software products sales are likely to hit $30 billion mark by 2025, as domestic companies expand their footprints globally and many new players are getting into the products space, as per the report from Nasscom and UnearthInsight. Software products could include customer relation management (CRM), enterprise resource planning tools or human capital management, etc. Furthermore, licensed software products created by domestic companies such as Ramco Systems and Infosys for payroll management and core banking fall under this definition.
The report says, the software products market is estimated to clock $13.3 billion in annual revenue for the FY22 ended March 31, after logging a CAGR of over 10 per cent in the previous three financial years. India is the leading sourcing destination across the world, accounting for approximately 55% market share of the US$ 200-250 billion global services sourcing business in 2019-20.
The IT industry accounted for 8% of India’s GDP in 2020. Indian IT's core competencies and strengths have attracted significant investment from major countries. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 74.12 billion between April 2000 and June 2021. The sector ranked 2nd in FDI inflows as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Japanese investments in the Indian IT sector grew 4X between 2016 and 2020. Investments stood at US$ 9.2 billion in the review period. Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra are diversifying their offerings and showcasing leading ideas in blockchain and artificial intelligence to clients using innovation hubs and research and development centres to create differentiated offerings.
According to STPI (Software Technology Park of India), software exports by the IT companies connected to it stood at Rs. 1.20 lakh crore (US$ 16.29 billion) in the first quarter of FY22. The export revenue of the IT industry is estimated at US$ 150 billion in FY21. Secondly as per Gartner estimates, IT spending in India is estimated to reach US$ 93 billion in 2021 (7.3% YoY growth) and further increase to US$ 98.5 billion in 2022. The BPM sector in India currently employs more than 1.4 million people, while IT and BPM together have more than 4.5 million workers, as of FY21. Going forward, the revenue share of platform-as-a-service and software-as-a-service in the overall software market is going to increase from 37.1% in 2020 to 59% in 2025.
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