India’s history may be thousands of years old, but in some ways She is still a child — an energetic and rapidly developing child that is making a splash. Although facing a great many challenges, India is also filled with even more optimism and opportunity.
This is particularly true for those working in information technology (IT) and enabled services. IT is India’s bread-and-butter and has played an integral role in ushering the country onto the international stage. Over the past 20 years, India has become the world’s biggest sourcing site for IT and related services, employing more than 10 million workers.
The presence of so many IT jobs has caused a corresponding growth in India’s education sector. This is especially true for engineering colleges and technology centers. Our large base of highly skilled workers is increasingly influencing multinational IT companies to establish operations in country.
Our homegrown IT professionals are gaining worldwide recognition for their intellectual capital, work ethic, and dependability. Add in the lower operational costs for IT services (3-4 times less expensive than in the U.S.) and it’s clear that our reputation as a world leader in the IT realm is deserved.
We are also entrepreneurially minded. We have the fourth largest base for tech startups worldwide — 3,100 in 2015, and are projected to reach 11,500 by 2020.
A booming market
India’s IT and IT-enabled services (ITeS), finance and insurance, have almost doubled in size since 2010 from $74 billion (U.S.) to $146 billion (U.S.). The industry has also become a major component of GDP, increasing from 1.2 percent in 1998 to 9.5 percent in 2015. According to the National Association of Software and Services Companies (NASSCOM), the sector is projected to reach $350 billion (U.S.) by fiscal year 2025.
Widespread internet access is also driving the demand for IT. Internet penetration is now almost 35 percent, with an estimated 462 million citizens able to access the internet within their own homes. Social media use is also expanding with 143 million India-based users.
Mobile devices (we have more than 200 million) and increased access, especially in rural areas, is also giving a strong boost to India’s e-commerce. Although the amount is small ($16 billion U.S.), we have the world’s fastest growing e-commerce market. Throw in that we possess the world’s largest population of millennials, and that two-thirds of our population is age 34 or younger, and the future looks bright.
According to a PricewaterhouseCoopers study, India’s e-commerce is expected to reach $100 billion (U.S.) by 2020. The Indian IoT industry itself is expected to reach $15 billion (U.S.) and include 28 billion internet-connected devices within the same time.
We have 51 million small- and medium-size businesses. While many are one-person operations, 12 million of them report high levels of IT usage and are anxious to adopt newer products that will help them conduct operations.
Foreign investment in Indian IT
India is also a safe bet for multi-nationals and private investors. Since 2000, our IT sector has attracted cumulative foreign direct investment inflows of more than $20 billion (U.S.) — $5 billion (U.S.) just in 2015.
In 2014, Indian internet companies saw a tenfold increase in venture funding over 2013. In 2012, there were 200 tech start-ups that received foreign venture funding. This increased to more than 800 in 2014.
Foreign investors are proving the truth of the axiom that “Money is attracted to opportunity” by pouring in funds and expertise in to all things IT related. Some of the more well-known investments include:
- Apple Inc. is planning their first foreign-based tech development center for Hyderabad — a $25 million (U.S.) venture that will create almost 5,000 jobs.
- Housejoy, a provider of online home-services, recently raised $22 million (U.S.) in funding from Amazon, Qualcomm and others.
- Global PE firm Blackstone Group acquired a $170 million (U.S.) minority stake in IBS Software.
Investing is also a two-way street. Infosys, India’s second largest IT services company has acquired U.S.-based Noah Consulting, a provider of advanced information management consulting services for the oil and gas industry. And Wipro Ventures, Wipro’s corporate-venture arm, is planning to invest $100 million (U.S.) in U.S.-based venture capital organizations.
Government Support for the IT sector
India’s Government is also supporting the growth of IT. The Modi administration in particular has been a strong backer of all things IT-related, pushing to expand the nation’s world leader credentials.
Whenever things change there is chaos, and India is no exception. As the “IT Age” envelops the country some will find it bothersome, but they won’t be able to deny the improvements.
Recently the Department of Communication and IT declared an initiative to increase the number of e-Seva centers (common e-service centers) from 150,000 to 250,000. These centers enable village-level entrepreneurs to interact directly with national experts for support, knowledge and business guidance.
Indian Railways, operated and managed by the Railway Ministry (Ministry), is the fourth largest railway system in the world. Besides freight, it transports more than 8.5 billion people annually. The Ministry is contributing to the digital push by introducing barcoded tickets and GPS-based IT within coaches. Services like e-tickets, wi-fi amenities at stations, and super-fast long route train service for unreserved passengers are IT-based initiatives aimed at increasing passenger traffic.
The Modi government has also expanded the e-Tourist Visa scheme to another 37 countries. No longer is there a ponderous and nebulous process to obtain a visa. E-Tourist enables foreign nationals to obtain visas online in a speedy and efficient manner. The program is now available for 150 countries.
The Department of Electronics and IT is planning a fund to provide capital to companies developing new technologies in the sectors of electronics and IT. The Modi administration also announced plans to construct five incubation centers for IoT start-ups, with a minimum of two centers to be set up in rural regions in order to focus on agricultural issues.
Then of course there is the joint venture with NASSCOM to promote path visions like Innovate for India, Digital India, and Smart City initiatives. These ventures are designed to encourage the younger generation to follow their dreams and contribute to projects with real business benefits.
The eastern part of India is a hub for SME IT companies which are doing amazing work in their fields. NASSCOM’s 10,000 Start-ups is also positioned to help start-ups by providing mentorship, incubation, angel-funding, industry-connections, and co-working space for warehousing and spreading awareness. The future
So much IT opportunity will also bring challenges that need to be met. As IoT becomes more widespread there will be endless cyber security issues; design flaws in products and services will need to be anticipated and prevented; data bases will need to be managed, and there will be an ever increasing demand for IT training and certification.
India is now a major IT player. If you think you have what it takes, are looking for opportunity, and enjoy flexing your IT muscles, Mother India is calling.