The information technology (IT) industry is an important part of the technology-driven knowledge economy of the 21st century. India is globally recognized as a knowledge economy due to its impressive IT industry. The role of IT in India’s economic development is absolutely essential. The IT industry mainly includes IT services, IT-enabled services (ITES), e-commerce (online business) and software and hardware products. The industry is also instrumental in developing the infrastructure for storing, processing and exchanging information for essential business operations and other organizations.
This industry has a noticeable effect on improving the efficiency of almost all other segments of the economy. Also, the role of IT in India’s economic development has huge potential for further acceleration of growth.
The role of IT in India’s economic development is unprecedented in any economy of the world. All sub-segments of the industry (hardware products have seen relatively less progress) have seen trends in revenue growth over the past 20 years. Moreover, it has boosted the growth of the Indian economy. The rapid progress of the IT industry and liberalization policies such as the reduction of trade barriers and the removal of import duties on technology products by the Indian government are essential for the development of the industry. Also, several other government initiatives such as the establishment of Software Technology Parks (STPs), Special Economic Zones (SEZs), Export Oriented Units (EOUs) and Foreign Direct Investments (FDIs) have enabled the industry to gain a dominant position in the IT world. industry.
IT during the pandemic
Currently, when the COVID-19 pandemic has hit the whole world and economies have been hit hard. The Indian IT industry continues to bring positive signals. It also has the potential to overcome this exceptional disaster. Moreover, it has emerged as a global economic powerhouse and a major contributor to the Indian economy in particular and the world in general.
The IT industry is driving India’s growth
The role of IT in India’s economic development expanded rapidly with an exponential growth rate after the economic reform in 1991-92. Indian IT companies have set up thousands of centers in India and around 80 countries around the world. Most of the global corporations source IT-ITES from the Indian IT sector. As it accounts for approximately 55 percent of the global service sourcing market ($200-250 billion) in 2019-20. The market size (especially exports) of the IT industry has expanded manifold from around USD 67 billion in 2008-09 to USD 191 billion in 2019-20. The revenue is expected to grow further in the coming years with an accelerating growth rate and is projected to reach US$ 350 billion by 2025.
Moreover, a notable feature of the Indian IT industry is that along with its expansion in terms of market size, it is also gradually adding a significant share to India’s Gross Domestic Product (GDP). As a result, improving the growth and development of the country. From a paltry 0.4 percent in 1991-92, the IT industry contributed around 8% to India’s total GDP in 2017-18. This share is expected to increase to 10% by 2025.
Subsequently, the number of Indian digital skilled workers increased over the period to represent approximately 75% of global digital talent. In addition, India’s four major IT companies (TCS, Infosys, Wipro and HCL Tech) employ more than one million employees. New IT-based technologies such as remote monitoring. telemedicine etc. is growing and increasing the demand in the digital economy. The introduction of fifth generation (5G) communication technology and increasing adoption of artificial intelligence, cloud computing, big data analytics and Internet of Things (IoT) will further increase the size of the IT industry in India. As the size of India’s digital economy improves, IT companies are setting up their hubs in Tier II and Tier III cities, which will further boost growth. And therefore reduce the existing differences.
