Exports of software services that include services rendered by foreign affiliates of Indian organizations, recorded 2.1% growth during the year 2020-2021 and stood at US$ 148.3 billion according to a Reserve Bank survey released on 20^th September 2021.

The growth & development of the software industry in India is a prototype of how economic liberalization when coupled with an entrepreneurial spirit can lead to the building of a sector, which contributes as much as eight percent to the Gross Domestic Product of a country such as India. On the back of 1000s of Information Technology services enterprises which were built over the last 30 years, the industry has generated One hundred and seventy-seven billion US dollars in revenue as well as more than one hundred and thirty-five billion US dollars in exports in the Financial Year 2018-2019. In addition, the Information Technology sector has also given rise to over four million direct & twelve million indirect jobs in the country. And one of the testaments to this enormous growth is the fact that the largest Indian Information Technology services organization is valued at over one hundred billion US dollars and generates over twenty billion US dollars in revenue.

While the Information Technology service exports from the country were estimated at around seventy-nine billion dollars in 2020 (fiscal year), the BPM & various other services followed with a value of thirty-three & thirty-four billion US dollars, respectively. Furthermore, the IT exports dominated the industry and account for the greater number of the overall revenue, however, the domestic market had displayed encouraging trends.

A Billion-dollar digital empire

While the Indian IT industry was estimated to spend almost 80 billion US dollars on numerous sections in the year 2021, the device & telecommunication services constituted the greater number of earmarked spending. IT services were the leading industry with greater than half of the export market share in India concerning the numerous divisions within the sector are concerned.

The IT industry’s impact on India

The impact of the Information Technology industry’s impact on the country is profound as it is not only one of the positive contributors to the country’s revenue growth, but also to the talent capability, diversity in the workforce, and digital infrastructure.

Growth in exports

In terms of revenue and foreign exchange, the Indian IT sector has changed/transformed the country’s finances at the same time financing a large share of imports, effectively. Currently, the IT sector in the country is the largest foreign exchange earner from exports and constitutes over twenty-five percent of India’s overall exports. The industry is contributing over seven to nine percent to the country’s GDP, already.

One of the key factors in the success of the Indian Information Technology industry is the ability of the sector to gather organizations together in order to develop an industry. The Indian IT sector has created a wide collaboration ecosystem – NASSCOM, which is in the form of an industry body and this has facilitated to build and develop best practices that get disseminated to the organizations across the industry.

Software services exports up 2.1 percent to USD 148.3 billion

The Central Bank released data that is related to the 2020-2021 round of its annual/yearly survey about exports of computer software & IT (information technology) enabled services. "India's exports of software services (excluding exports through commercial presence) are estimated at USD 133.7 billion during 2020-21, registering 4.0 percent growth over the previous year," the RBI said.

While Computer services accounted for 65.3 % & ITES accounted for 34.7 %, of the overall software services exports, the BPO services were the dominant section of exports of ITES. Furthermore, over half of the exports of software services were contributed by private limited organizations, according to reports.

"The United States was the major destination for software exports accounting for 54.8 percent; Europe had 30.1 percent share, nearly half of which was in the UK," it said.

While the US dollar was the principal invoicing currency for software exports with seventy-two percent share, the euro & pound sterling (together) constituted another 15.9%.

Further in 2020-2021, the share of mode-1 (cross-border supply) in India’s exports of software services rose to 78.4%, the Reserve Bank of India stated. And, this share has been increasing over the years.

From 38.8% in 2002-2003 to 64.6% in 2009-2010. And, in 2019-2020 to 75.1%, further.

This is at the cost of the other 3 modes of delivery that include:

• mode-2 (consumption abroad);
• mode-3 (commercial presence); and
• mode-4 (presence of natural persons)

Global impact

India has emerged as one of the software powerhouses serving countries across the globe. Furthermore, the Information Technology industry has not only facilitated global corporations to optimize their cost, improve quality, create job opportunities & capabilities across the world, but it has also driven international business models & technology innovations too.