After India’s liberalisation, its IT sector witnessed a boom in the 1990s. As of 2020, the Indian IT industry contributed 8% to the country’s GDP. The story of the rise of IT companies in India began when Tata Consultancy Services (TCS) started its business in 1967. HCL Technologies (1976), Infosys (1981), Wipro (1981), and Tech Mahindra (1986) soon followed and are among the top IT companies in the world. IT companies have outperformed every other sector in the capital markets giving outright returns to their investors. TCS has the second largest market capitalisation in India, right behind Reliance Industries. The Indian IT industry comprises information technology services, consulting, and outsourcing. Statistics show that India is the largest exporter of IT and offers the cheapest labour globally. This is the reason why various multinational companies prefer Indian firms for accessing IT services, consulting and outsourcing. Another industry where India is a global leader is the Business Process Management (BPM) industry. According to an Indian Brand Equity Foundation (IBEF) report of February 2022, TCS, Wipro and Infosys were expected to provide around 1.05 lakh job opportunities in the previous financial year. The report also cited Gartner projections regarding IT spending in the country, estimating it to be $101.8 billion in 2022. Meanwhile, the Indian IT-BPM industry also has the highest employee attrition rate. The reason for this is better salaries offered by competitor IT or consultation-based companies. Bangalore, Chennai, Pune, Delhi, Hyderabad and Kolkata are some of the major IT hubs in the country and play a huge role in handling foreign clients and solution-based projects. As per the IBEF report cited above, “the computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth $81.31 billion between April 2000 and December 2021.” On the other hand, this year’s Budget allocated a whopping Rs 88,567.57 crore ($11.58 billion) to the IT and telecom sector.
10 May 2022
Atharva Agashe
