Indian IT-BPM industry to reach over $160 billion by 2016: Nasscom

The current fiscal year FY2015 brought in overall optimism for the Indian IT-BPM industry and is expected to meet guidance for the year in constant currency. The industry continued to evolve over the years and prioritised on enhancing efficiency, enabling transformation and agility and partnering for digital initiatives. Aggregate industry revenues for FY2015 are estimated at $146 billion.

FY2015 is expected to see the export market at over $100 billion, recording a 13.1 per cent growth in constant currency over last year. Growth in reported currency is estimated at 12.3 per cent. ER&D and product development segment is the fastest growing at 13.2 per cent, driven by higher value-added solutions from existing players and expansion of the GIC landscape.

During the release of the NASSCOM Strategic Review 2015 at Grand Hyatt - Mumbai, R Chandrasekaran, Chairman, NASSCOM, said, “We are delighted with the robust growth demonstrated by the industry during the current fiscal year. The industry today has a very diverse landscape which is constantly evolving and fuelling growth for the industry. Digital also became main stream during the year, with industry increasingly investing in digitized solutions to drive future growth opportunities. Interestingly digital solutions in the year accounted for 12-14 per cent of the industry revenues. NASSCOM will continue to work with its members to build capabilities within the country and position India as an ideal global digital hub, leveraging technology for transformation and driving innovation across domains.”

Digital solutions around SMAC – upgrading legacy systems to be SMAC enabled, greater demand for ERP, CRM, mobility and user experience technologies is driving growth in IT services. Infrastructure outsourcing and software testing segment also outpaced the industry growth rate. The BPM sector is being driven by greater automation, expanding omni-channel presence, application of analytics across entire value chain, etc.

The year also witnessed hyper-growth in the technology start-up and product landscape and India is already ranked as the fourth largest startup hub in the world with over 3100 startups in the country.

Exports to USA, the largest market grew above industry average, aided by an economic revival and higher technology adoption. Demand from Europe remained strong during the first half of the year, but softened during the second half due to currency movements and economic challenges. Manufacturing, utilities and retail growth remained strong as clients increase discretionary spend on customer experience, digital, analytics, ERP updates and improving overall efficiency.   

The Indian IT-BPM sector continues to be one of the largest employers in the country directly employing nearly 3.5 million professionals, adding over 2,30,000 employees.
 
The domestic IT-BPM market is rapidly approaching the $50 billion mark. In FY2015, the market is expected to be a little over $48 billion, an annual growth of 14 per cent. This is faster than the average industry growth, and is largely being driven by the booming e-commerce segment. Stable government with a technology focused growth agenda is further boosting technology adoption in the domestic market

“India is jumping the technology maturity curve and is emerging as a digital economy. The recent announcements by the Government on Digital India, Make in India, Skilling India are creating a renewed thrust on the domestic market. NASSCOM will continue to partners with diverse industry sectors and related government departments to enable technology adoption for key challenges faced by the country,” said R. Chandrashekhar, President, NASSCOM.

In FY2016, NASSCOM expects the industry to add revenues of $20 billion to the existing industry revenues of $146 billion. Export revenues for FY2016 is projected to grow by 12 to 14 per cent and reach $110-112 billion. Domestic revenues (including ecommerce) for the same period will grow at a rate of 15-17 per cent and is expected to reach $55-57 billion during the year.

BVR Mohan Reddy, Vice Chairman, NASSCOM said “The future looks very promising as the IT-BPM industry is gearing itself well to next phase of challenges. Digitization, disruptive technologies and innovation will fuel growth with new opportunities in the years ahead. NASSCOM will work with its members to showcase India as a destination of high value globalized solutions which are transformative and innovative. The fast growing technology start-up sector will further drive innovation in the country”.