NEW DELHI: India’s IT sector is projected to grow by 5.1 percent in the financial year 2024-25 (FY25), reaching revenues of $282.6 billion, industry body Nasscom announced on Monday. This growth forecast suggests the sector is on track to surpass the $300 billion mark in the subsequent fiscal year, reflecting a 6 percent rise from FY25 levels. Nasscom president Rajesh Nambiar revealed these details at the Nasscom Technology Leadership Forum, describing it as "a good outcome broadly, considering everything happening around us."
The Indian tech industry has shown resilience and adaptability, with employment also on the rise, as 126,000 new jobs were added during the year. This brings the total employment within the sector to 5.8 million, according to Nasscom’s projections.
The growth is not uniform across all sectors; traditional IT services are expected to see revenues increase by 4.3 percent, reaching $137.1 billion for FY25. Meanwhile, revenue from business process outsourcing (BPO) is set to rise by 4.7 percent to $54.6 billion.
The brightest star among the sectors is engineering research and development (ER&D), which is projected to grow the fastest at 7 percent, equaling $55.6 billion. Domestic revenues are expected to surge as well, with predictions of 7 percent growth leading to $58.2 billion, outpacing export growth, which is forecasted at 4.6 percent, amounting to $224.4 billion.
Nambiar pointed out the balance within export revenues, noting they are evenly split between global multinationals and India-based IT firms. The mixed performance highlights the importance of both domestic demand and international relationships to the sector's overall growth.
"From our perspective, the data clearly indicates the sector is poised for substantial growth, which could have significant economic ramifications," said Nambiar. This growth is particularly noteworthy as it occurs during periods of economic uncertainty on the global stage, reflecting the IT sector's robustness and adaptability to changing conditions.
While the projections show continued growth, the sector faces challenges, including the need for skill enhancement to keep pace with technological advancements and changing client needs. Nambiar emphasized the importance of upskilling the workforce to address these challenges, ensuring the sector continues to thrive amid rapid technological evolution.
The future looks promising for India's IT sector, with strong domestic demand alongside healthy international engagements. Companies are expected to continue to innovate, leveraging advancements such as artificial intelligence and machine learning to drive their growth. This innovative spirit will be key to cementing India's position as a global hub for IT services.
The IT sector's growth will likely contribute positively to India's overall economic health, with job creation and enhanced competitiveness on the global stage. This growth narrative not only reinforces the importance of technology but also highlights the potential of India's workforce to meet future challenges.
Looking forward, stakeholders across the industry remain cautiously optimistic about overcoming potential hurdles. The promising projections, coupled with strategic initiatives from the government and private sector, could propel India’s IT sector to new heights, asserting its readiness to compete on the global stage.