India's IT Industry: Data & Performance
India is well-known for being the biggest IT outsourcing resource in the world. Based on a report delivered by IBEF, Indian IT & ITeS companies have set up over 1,000 global delivery centers in about 80 countries across the world. According to the same report, the country has become one of the biggest hubs of digital competencies with around 65% of the world’s digital talent being present in the country.
In 2019, the value of the IT market in India was estimated at $177 billion, registering a growth of 6.1% from 2018. It is expected that by 2025 the market value will reach $350 billion, as more and more companies source out Indian professionals due to their significantly lower hourly rate.
According to payscale, the average hourly rate of an Indian web developer is around $5,39, which is considerably lower than the global average.
As for the business environment, it is described as diverse and complex by Kaushik Kapadiya from TechDoodles. He also states that India is one of the fastest-growing major economies in the world, driven by a large and growing consumer market, a young and educated workforce, and ongoing economic reforms. However, the business environment is also characterized by bureaucratic red tape, an underdeveloped infrastructure, a complex regulatory environment, and a challenging legal system. Despite these challenges, many companies have found success in India by navigating the complexities of the market and leveraging the country's strengths.
At the same time, Romy Frederick from iLeaf Solutions states that the IT industry in India is highly competitive, with both domestic and international players vying for market share, resulting in a vibrant ecosystem of IT companies, startups, and service providers. Overall, India's IT business environment offers significant opportunities for IT companies looking to set up operations or expand their existing presence
Why you should work with an Indian IT company
Lower prices and skilled IT professionals are the main attraction for most of the clients that worked with Indian companies. The continuously growing competition in the IT industry made companies focus more on quality and segmented the market into several different categories depending on types of services, price range, location, competencies, and portfolio. The enormous variety of companies to choose from, make India a colorful and expanded market where the possibility to find the company that will deliver exactly what you need is higher. Also, working with a local IT company in India can have several advantages, including access to a large pool of skilled and talented IT professionals, cost-effectiveness, a favorable business environment, and a strong focus on innovation and technology. Additionally, local IT companies may have a better understanding of the local market, culture, and regulations, which can help them tailor their services to meet the specific needs of their clients.
What you should be aware of when working with an Indian-based IT company?
When working with a local IT company from India, it is important to be aware of the cultural differences that may exist in terms of communication styles, work practices, and business norms. It is also important to clearly define project requirements, timelines, and deliverables, and establish a strong communication channel to ensure that any issues or concerns are promptly addressed. Additionally, it may be beneficial to have a local point of contact to help navigate any potential challenges that may arise due to differences in time zones, language barriers, or cultural nuances.
Are Indian IT companies reliable?
The Indian IT market exposes a huge number of companies, that act differently, have various experiences, and engage different-level professionals in the IT process. The growing number of companies that relocate and invest in Indian IT infrastructure reveals an increasing level of trust in the country’s industry. However, approaching an Indian company without good research about its history, portfolio, and reputation may be challenging.
How the Indian IT industry relates to the neighboring countries
The biggest regional competitor of the Indian IT industry is the Chinese one. Both countries have known growth in the past few years within the sector, and provide similar opportunities to foreign companies and potential customers. On the other hand, Indian companies tend to provide more creative services, while China focuses on computing and software development.
Generally, India is a good opportunity for budget projects and average tech competencies compared to the EU & US markets. In terms of IT investments, India is a promising destination.
What Makes India Attractive for IT Companies?
Local tech leaders and professionals working for IT companies in India have divided opinions as far as it concerns the reasons that make the country attractive for IT companies.
According to Agnish Rawat from Fluidscapes, the attractive part is IT wages in India are usually lower than in other countries so it is the best country to outsource IT services with low wages and more value. With a market size of between $124 and $130 billion USD, India is the largest source of IT industry supplies in the world. Unattractive is that India's tariffs, which are still among the highest in the world, keep that country from being an appealing export market for labor-intensive manufacturing.
At the same time, Aniket Kumar from Kellton Tech Solutions Limited adds a few more things to the list. Among them, we can find:
- Skilled Workforce: India has a large pool of talented and skilled IT professionals who are well-versed in the latest technologies. The country has a strong education system that produces a steady supply of graduates in computer science and engineering.
- Business Environment: India has a liberalized and investor-friendly business environment that encourages foreign investment. The government has launched several initiatives to ease regulations and promote entrepreneurship, such as the Make in India program, Digital India program, and Startup India campaign. The Indian government is also taking steps to streamline procedures related to tax, intellectual property, and other legal requirements.
- English Proficiency: India has a large English-speaking population, making it easy for international IT companies to communicate with their Indian teams. This language proficiency also helps Indian IT professionals to work with clients and colleagues from different parts of the world.
But there's also a downside. Deepak Kumar from Syncrasy Tech approached the question from both ways - attractive and unattractive:
- Large and growing market size
- A large pool of skilled workers
- Lower labor costs compared to other countries
- Supportive government policies for foreign investment
- The complex legal and regulatory environment
- Poor infrastructure in some areas
- Lack of uniformity in education and training
- Bureaucratic hurdles and corruption in some areas
TCS - The Dominant Player In The Indian IT Market
One of the most well-known IT companies from India is Tata Consultancy Services (TCS), which is part of the Tata Group conglomerate. TCS is the largest IT services company in India, and it operates in over 46 countries with more than 469,000 employees.
The company has a strong focus on sustainability and social responsibility, with initiatives such as the TCS Foundation, which supports education, healthcare, and environmental programs in India.
However, the competition grows tight, as the IT market in India is constantly changing and evolving with hundreds of thousands of professionals in the field, and even more businesses that are in need of IT services.
How Does the Indian Government Support The IT Industry?
The Indian government has taken several initiatives to encourage the development of the IT sector in the country. Here are some examples:
- Startup India: The Startup India program was launched in 2016 to provide support and incentives to startups in India. The program offers tax exemptions, access to funding, and other benefits to eligible startups. This program has helped to create a favorable environment for startups in India, including those in the IT sector.
- Digital India: The Digital India program aims to transform India into a digitally empowered society and knowledge economy. The program includes initiatives to improve internet connectivity, digital literacy, and digital infrastructure. This has created a more conducive environment for IT companies to operate and grow in India.
- Make in India: The Make in India program is a government initiative to encourage companies to manufacture and invest in India. The program offers various incentives and benefits to companies that manufacture or invest in India, including those in the IT sector.
- Skill India: The Skill India program aims to train and upskill Indian workers to meet the demands of the job market. The program includes initiatives to provide training in the latest technologies, including those relevant to the IT sector. This has helped to create a skilled workforce that is able to support the growth of the IT sector in India. Research and Development: The government has also invested in research and development in the IT sector, with initiatives such as the National Supercomputing Mission and the Electronics Development Fund.
These initiatives are aimed at promoting innovation and developing cutting-edge technologies in the IT sector. These initiatives have helped to create a favorable environment for IT companies to operate and grow in India, including those related to funding, infrastructure, training, and innovation.
Additionally, the government has invested in building digital infrastructure like the National Knowledge Network and the National Optical Fiber Network to improve connectivity across the country. These measures are expected to create a conducive business environment for the growth and development of the IT sector in India.
Moreover, the series of initiative that reflects Indian Government support for the IT industry includes
- Production Linked Incentive (PLI) scheme: The Indian government has launched several PLI schemes to incentivize domestic manufacturing in various sectors, including IT hardware and electronics.
- Special Economic Zones (SEZs): The government has set up SEZs, which offer tax incentives and other benefits to businesses operating in certain geographic areas.
- National Policy on Electronics: The National Policy on Electronics aims to promote domestic manufacturing of electronics, including IT hardware and software, and reduce dependence on imports.
- IT parks and incubation centers: The government has established IT parks and incubation centers to provide infrastructure and support for IT companies, startups, and entrepreneurs.
- Research and development initiatives: The government has launched several research and development initiatives to promote innovation and development in the IT sector, such as the National Supercomputing Mission and the Center of Excellence for Internet of Things.
Best Cities to Do IT In India - Bengaluru and Hyderabad
Local tech leaders representing prominent IT companies from India point to Bengaluru and Hyderabad when it comes to the best places to work in IT within the country.
Most of their arguments that support these options are referring to the quality of life, the ease of doing business, and the large tech pool.
On this note, we decided to quote Romy Frederick from iLeaf Solutions, which explained why these two locations are the best choice.
Bengaluru (also known as Bangalore): Bengaluru is often called the "Silicon Valley of India" because of its reputation as a hub for the IT industry. The city is home to several major IT companies, including Infosys, Wipro, and Tata Consultancy Services. Some verifiable arguments supporting Bengaluru's status as an IT hub include:
- Large talent pool: Bengaluru has a large pool of skilled IT professionals, with over 200,000 people employed in the IT industry in the city.
- Established infrastructure: Bengaluru has a well-developed infrastructure that includes several IT parks, high-speed internet connectivity, and a supportive government.
Hyderabad: Hyderabad is another city that has emerged as a hub for the IT industry in India. Some verifiable arguments supporting Hyderabad's status as an IT hub include:
- Thriving startup ecosystem: Hyderabad has a thriving startup ecosystem, with several incubators and accelerators that support the growth of new companies.
- Strong government support: The government of Telangana, the state in which Hyderabad is located, has implemented several policies to support the growth of the IT industry, including providing funding and incentives to startups.
- Quality of life: Hyderabad is known for its high quality of life, which makes it an attractive location for IT professionals.
Overall, both Bengaluru and Hyderabad are considered to be some of the best cities for IT companies in India, with strong infrastructure, supportive governments, and thriving ecosystems that support the growth of the industry.
Mumbai only comes in third place. Surprisingly or not, Mumbai is considered overpopulated and too crowded. This factor determines lower life quality compared to Bengaluru and Hyderabad. Nonetheless, according to Aniket Kumar from Kellton Tech Solutions Limited
Mumbai, India's financial capital, is also home to several IT companies, including those in the fintech and e-commerce sectors. The city has a large pool of skilled IT professionals and a favorable business climate, with access to funding and good connectivity.
The Indian IT Talent Pool - One Of The Most Valuable Resources For The Entire Industry
India has a large talent pool of skilled professionals in the IT industry, which is one of the factors that make the country attractive to IT companies. Many Indian students choose to study engineering or computer science in order to pursue a career in the IT industry.
In recent years, there has been a growing trend of Indian students pursuing degrees in fields such as data science, artificial intelligence, and machine learning, reflecting the increasing demand for skills in these areas. Additionally, many Indian IT professionals are well-versed in programming languages such as Java, Python, and C++, and are familiar with various technologies and tools used in the industry.
The desire and attraction towards the IT industry in India can be attributed to a few factors. Firstly, the industry offers good salary packages, growth opportunities, and the chance to work with cutting-edge technologies. Secondly, the IT industry is seen as a stable and secure career choice, which is particularly attractive to Indian students and professionals. Finally, the IT industry is considered to be a key driver of India's economic growth, which further enhances its appeal.
Additionally, there is a growing interest and attraction towards the IT industry among young people in India, thanks in part to the success stories of major Indian IT companies and the increasing demand for digital skills in today's job market. Many educational institutions in India are also focusing on developing skills in emerging technologies like AI, machine learning, and data science.
This article was created together with prominent figures and professionals coming from reputable Indian IT companies. Special credits: Agnish Rawat, Aniket Kumar, Kaushik Kapadiya, Romy Frederick, Deepak Kumar