Leveraging accelerating global technology spending, India’s tech sector is expected to grow by more than 15% in fiscal 2022. The National Association of Software and Services Companies (NASSCOM) today presented today’s 2022 Strategic Review featuring the key trends shaping 2021 and the outlook for the industry.
Strong growth crossing $200 billion in revenue
India’s tech industry passed the $200 billion revenue mark, reaching $227 billion in revenue in fiscal year 2022, recording an additional $30 billion in revenue during the year with an overall growth rate of 15.5%. Registering the strongest growth on record since 2011, all industry sub-sectors recorded double-digit growth. Exports (including hardware) grew by 17.2%, generating revenues of $178 billion, or more than 51% of India’s total services exports. India’s massive digital infrastructure has played a key role in India’s adoption of technology, with public digital platforms becoming the foundation of India’s digital advantage. Propelled by this increased domestic demand, the technology industry’s domestic revenue grew 1.2x in fiscal 2019 to around $50 billion. E-commerce grew by 39% to reach $79 billion in 2021-22. The digital revenue share stood at 30-32%, registering additional revenue of $13 billion in fiscal year 2022E.
Sharing her view, Rekha M. Menon, President of NASSCOM, said, “Fiscal 2022 was a breakthrough year for the Indian tech industry. We have shown strong and broad-based growth, significantly increased the number of jobs and are proud to continue to be an engine of India’s economic growth and a beacon for inclusion and diversity. We are excited about the opportunities in Techade as we enter an era of exponential transformation and technology becomes essential to progress. We remain committed to catalyzing the trillion-dollar digital economy by focusing on talent, technology, collaboration and innovation.
India – The Nation of Digital Talents
India has emerged as a global hub for digital talent with over 5 million tech workforce. The industry saw an estimated nearly 10% growth in the direct employee pool in fiscal year 2022E with the highest-ever net addition of around 450,000 to its employee base. With 1 in 3 employees already digitally skilled, the digital technology talent pool is 1.6 million, growing at a CAGR of 25%. With a focus on reskilling and upskilling, India’s tech industry re-skilled around 280,000 employees in FY2022. With over 36% female employees, India’s tech industry is one of the largest private sector female employers in India with over 1.8 million women in the workforce.
Rapid advances in innovation and transformation capabilities
India’s tech industry has become a hotbed of digital technology with 30-32% of revenue coming from digital flow and over 66% of largely digital transactions. The industry also undertook more than 290 mergers and acquisitions whose primary focus was digital. India continues to be the 3rd largest startup hub in the world with over 25,000 tech startups and witnessed 42 new unicorns and 11 IPOs in 2021. Over 2250 tech startups have been founded in 2021 and highest total ever- $24 billion in funding raised in 2021. The industry has also witnessed maturity in the software product segment with the presence of over 2000 product companies software and 1000 SaaS companies in India. Indian SaaS-based companies also secured $4.5 billion in funding in 2021. With a massive focus on IP creation, India ranked 46th in the Global Innovation Index . The tech industry filed over 138,000 tech patents in India between 2015 and 2021 and increased its R&D investment by almost 1.5 times across the spectrum. India’s tech industry has emerged as the leader in seamless transformation into hybrid working models. With over 70% of technology organizations considering adopting hybrid work models, the industry has set global standards for virtual screening, recruiting, onboarding and training, making it a status standard. what.
Sharing her perspective, Debjani Ghosh, President of NASSCOM, said, “2021 was a great year for the year with our combined revenue exceeding $200 billion. Although exports have played a significant role in this growth, the domestic market has emerged as a large propeller, approaching a total of $50 billion due to India’s adoption of technology with public digital platforms like Aadhaar, UPI and CoWIN playing an important role in providing services to citizens. Fiscal 2022 will be a year of landmark growth for the industry. NASSCOM will continue to focus on priorities and play its role as a catalyst for the trillion-dollar digital economy through accelerated industry growth and the creation of thought leadership. Leading the industry transformation narrative of Think Digital Think India, the industry will maximize technology innovation and impact and build on future preparedness with the industry’s Digital Next priority.
Financial year 2022-23: Increasingly strong growth
Despite headwinds such as geopolitics, macroeconomic fluctuations, supply chain disruptions and the aftermath of the pandemic, the industry will continue to show courage, resilience and agility. According to the NASSCOM Tech CEO Survey 2022, over 70% of CXOs believe fiscal 2023 is poised to be another year of growth for the industry. Current trends in demand for technology spending and economic growth indicate a positive outlook for technology spending and hiring. The industry has also set an ambitious goal of $350 billion by fiscal year 2026, with growth of 11-14%.
Innovation and partnerships across the ecosystem will accelerate digital capabilities, leading to increased investment in R&D, product and platform creation. While cloud, cybersecurity, data and AI will continue to be the industry’s top technology priorities, centers of excellence will be created in emerging areas such as quantum technologies. Positive revenue growth will be driven by strong deal pipelines, with the industry seeing a higher proportion of smaller deals for differentiated niche products, increased digital demand and high-tech spending in the pharma/pharmaceutical sectors. healthcare, BFSI, manufacturing, retail/e-commerce in 2022. The industry will continue with its “Employee First” approach, working aggressively on priorities such as attraction and retention talent, accelerating recruitment for skills and scale, especially for digital, campus and non-engineering talent. Hybrid work models will continue to persist depending on individual company policies and job requirements.
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