Economic Survey 2022: IT services sector grows by 2.1% to clock $178 bn revenue in 2020-21

Despite the services sector bearing the brunt of COVID pandemic, Indian IT services and BPM industry revenues have proven to be resilient, clocking $177.9 billion in 2020-21, a growth of 2.1 per cent year on year (YOY) with a significant portion of this revenue coming from exports.

 
During 2020-21, exports revenues grew by 1.93 per cent to reach $149.1 billion, the Economic Survey , 2022 stated. The Economic Survey, while quoting a NASSCOM report, stated that the IT/ BPM industry (excluding e-commerce) hired 1.38 lakh employees during the period.
 
Within the IT-BPM sector, IT services constitutes the majority share (> 51 per cent). Its share has been consistent over the last many years. The share of Software &  Engineering services in the IT-BPM sector, which was consistently growing each year, saw a slight decline to 20.78 per cent in 2020-21.

BPM services share remained same at 19.8 per cent, while that of hardware services slightly improved to 8.3 per cent. In 2020-21, IT services, Software & Engineering services, BPM services, and hardware services earned revenues of $99.1 billion, $ 40.3 billion, $38.5 billion, and $16.1 billion, respectively, the survey noted.
 
In terms of industry-wise revenue break up, out of the total $149.1 billion in exports of the IT-BPM sector (excluding hardware and  e-commerce) in 2020-21, Banking, Financial services and Insurance (BFSI) contributed $ 61.4 billion, accounting for over 41 per cent of the exports.

Hi-tech/Telecom and Manufacturing services contributed $ 26.3 billion and $ 24.3 billion, accounting for a share of 17.65 and  16.28 per cent, respectively

All the three sub-sectors witnessed a marginal increase  in export revenues in 2020-21 YoY, with BFSI growing by 3 per cent, Hi-tech/Telecom services  by 2 per cent and Manufacturing services by 1 per cent.
 
Distribution of export revenues

United States continues to remain the biggest client geography for Indian IT service companies accounting for 62 per cent of export revenues worth  $92.1 billion in 2020-21.

This is followed by UK, which is second largest export market for  IT-BPM services with a share of around 17 per cent. The revenue from exports to UK amounted $25.2 billion in 2020-21. Europe (excluding UK) and Asia-Pacific account for 11.5 per  cent and 7.7 per cent respectively of the export earnings of India, the Economic Survey said.