Indian IT Companies contribution

India’s IT industry contributed around 7.7% to the country’s GDP and is expected to contribute 10% to India’s GDP by 2025. The IT industry has not only impacted the economic growth of India, but it also has made the government more accessible and competent. The IT industry is essential for our economy to prosper exponentially and to generate millions of job opportunities.

A recent study by Nasscom shows that the Indian IT companies made a massive contribution to the US economy last year through employment, investment, strategic partnerships, and business deals.

The Indian IT companies, alongside its customers, have generated $396 billion in US sales, supporting a total of 1.6 million jobs and contributing over $198 billion to the US economy. It also spent about $1.1 billion to grow STEM learning in the US and developed partnerships with nearly 180 institutions in the US.

Nearly 40-78% of the revenues of Indian IT companies come from the US. Of which, TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra have more than 50% exposure. Indian IT accounts for about 55% of the global IT services industry market share.

A report released by HDFC Securities in June 2022 reveals that India-headquartered IT services firms like TCS, Tech Mahindra and HCL have doubled their revenue market share from 13.9% in 2011 to 28% in 2021. Interestingly, market share of firms with foreign headquarters like Accenture, Capgemini and Cognizant have dropped from 86% to 72% in the same time.

In 2022, the Indian IT industry crossed the $200 billion mark in revenues to touch $227 billion, an impressive record according to Nasscom. Indian companies also invested $1.1. billion while partnering with more than 180 colleges and universities building a more robust pipeline for STEM courses.

The report states that the demand for STEM jobs in the US is expected to grow 1.5 times faster as compared to non-STEM occupations over the next decade. More than 70% of this demand would be supported by the IT

As the US recession gains momentum, analysts from Goldman Sachs predict that IT spending would be negatively impacted in the US as well as Europe. This is consequently expected to also impact IT companies.

While the Indian IT sector on a whole is putting up a more optimistic front and allaying fears based on high global demand for IT services—the impact of a US recession on IT companies cannot be fully ignored.

Considering India’s inflation rate spiked to 6.95% in March 2022, which is the highest recorded rate since October 2020, experts believe that a potential plunge should be expected.

S Mohini Ratna, Editor, VARINDIA