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What Determines The Future Of The Indian IT Industry?

Indian it industry future

The Indian IT sector today is advancing at a limitless pace. As this speed, it’s fair to mention that it is expected to bypass the $300-$350 billion monetary mark in the upcoming five years. The rate at which it’s currently clipping is around 10% a year.

Almost inevitably, it means that the $194 billion Indian tech industry will present an accelerating growth shortly. You can surely expect it to boost the country’s growth immensely by 2025. That’s even beyond the 7.5% growth rate noted over the past five years.

Besides, one of the biggest factors that have transformed India to make its mark across the globe is its booming IT industrial sector itself. The contributions made by the IT industry towards the country's GDP have manifested a steady hike in the Indian economy. On top of that, as per the current size of India’s digital economy, the IT industry has been phenomenal in revolutionizing the demands for IT services & centers in the country.

India's IT industry is often recognized as a hub of innovators globally. Besides, various top-notch organizations have set up their offices here in India as well. These include Google, Accenture, and others. This practice has molded the Indian economy from an agricultural-based economy to a knowledge-driven economy.

Accordingly, in this blog, you’ll read about how the Indian IT sector evolved with time to be what it is today. The factors that represent its remarkable growth & that make you realize why it’s the best offshore location for software development solutions.

Table Of Contents

The Evolution Of Indian IT Industry

The Indian IT Industry is a clear representation of what a 21st-century knowledge-driven economy should look like. The current hike is unparalleled even when compared with the other economies of the world. Yet, in the past, India seemed relatively behind in terms of economic growth, lack of skilled engineers, & guiding framework for technologies. The years after 1970 brought a tremendous change & took a turn for the better growth & what we call, the best in the world today.

The establishment of the Department of Electronics (DoE) in 1970 opened the door to potential opportunities in this field. Since then, the rapid revolution during the period led to the formulation of a New Software Scheme in 1972. This scheme further authorized the import of hardware & export of software. In the late 1990s, the liberalization policy promoted duty-free export & encouraged foreign investment at this stage.

Besides, the first breakthrough of IT entrepreneurship in India led to the establishment of development centers in the country. The biggest IT firms today were part of this wave, emerging as an IT hub for software companies. Soon this rapid growth led to the recognition as the world’s largest offshoring destination for IT services. In the last decade, the pool of competent engineers took a step ahead in expanding the demand for such talent & technology over time.

The Current Scenario: Market Size, Growth, Developments & Initiatives

The current scenario of the IT industry accounts for 75% of the digital talent worldwide. With that, it’s also important to analyze where India stands in terms of -

Market Size

The IT industry contributed 8% of India’s GDP in the year 2020. Whereas, the IT-BPM industry was estimated to be at around $194 billion in the financial year 2021. Following this, the domestic revenue was also valued at $45 billion & export revenue at $150 billion in FY 2021. Amid the rise in the revenue at this pace, the industry is expected to rise even beyond 7.5% in the upcoming 5 years.

IT Industry Growth

There’s no doubt about how the IT industry is boosting India’s growth with its exponential hike rate. Along with the expansion within & beyond the domestic boundaries, India’s GDP also rose to make a direct impact on the country’s development. The market size is still expected to increase by 10% by the year 2025. On top of that, India’s largest tech companies have hired more than a million engineers owing to their best tech talents.

Besides, the constant uplift & expansion in the digital economy has rolled out the possibility of staying behind the world's other economies. Top IT companies are already establishing their centers in India to accelerate the opportunity to scale up at the right time.

It’s crucial to know that these digital technologies & Indian skilled engineers will not only augment the profits of your businesses. Instead, it speaks for itself by transforming the economic share and making the country a global IT hub.

IT Developments

The latest advancements in the field of technology that you must know about are as follows -

  • Artificial Intelligence (AI)

  • Cloud Computing

  • Internet of things (IoT)

  • Blockchain

  • Robotic Process Automation (RPA)

  • Augmented Reality

  • Leading tech firms - TCS, Wipro, Infosys & Tech Mahindra coming up with dynamic ideas in the above-mentioned fields. Moreover, custom solutions are being offered with the help of R&D centers to take innovation to the next level.

Government Initiatives

The Ministry of Electronics & Information Technology constantly coordinates through strategic decisions, programs, R&D choices empowering innovation every day. The Indian IT industry however has a leading position globally. The offshoring services offered with leverage in hand in terms of the country’s cost competence, it’s almost 3-4 times lower than the US.

The following are the initiatives taken by the government for the growth of the IT sector in India -

  • Software Technology Parks (STP)

  • Special Economic Zones (SEZs)

  • Foreign Direct Investment (FDI)

  • Allocation of US$7.31 billion to the IT & telecom centers

  • July 2021 - Launch of 6 technology innovation platforms for global competitiveness

  • Aug 2021 - Launch of The India Internet Governance Forum (IIGF)

  • Sep 2021 - Inauguration of 5 National Institute of Electronics & Information Technology (NIELIT)

The Future Of IT Technology In India

Indian it industry future

The growth in the IT industry of India is a result of both domestic companies & offshoring development centers. Owing to the liberalization in 1991, foreign investments were welcomed to India. As a result, when India emerged as the IT hub for software companies all over the world, the economy flourished with ongoing market growth.

With advancement at such a rate, there’s no doubt that your business will have a competitive edge in the industry with significant profits. The key technological drivers in the field of -

  • Machine learning

  • Artificial intelligence

  • Cloud computing

  • Big data analytics

  • Blockchain

  • Robotics

  • Internet of things (IoT)

  • Augmented reality (AR)

  • Virtual reality (VR)

  • Automation

Will dominate the IT advancements for more than a decade. Indian offshore services will become a more attractive deal for tech buyers based abroad. The rate at which the IT industry is booming will top the global IT race. The country that produces one million engineers yearly is destined to have a high-quality, low-cost software solution.

It is estimated that with the emergence of new technologies & better academic facilities, the IT sector will be the massive employer in India.

Key Factors Behind The Global Success Of Indian IT Industry

The Indian software industry in present times is responsible for exporting two-thirds of IT services to the United States. Having said that, factors that contribute to the country’s robust IT system are the backbone of the entire functioning ecosystem. It’s important to look at the big picture and capitalize on a location that contributes to the success of your business.

Indian engineers in the upcoming silicon valley of the country are not only culturally competent but also technologically adept in their field. With constant innovation & wholesome quality standards, the major factors that make up for this global recognition are as follows -

  1. Low operating costs, recruitment costs & tax advantages owing to the low cost of living in the country

  2. A large pool of skilled engineers coming from a comprehensive education system

  3. Sustainable & Integrated IT infrastructure for constant innovation

  4. Home to biggest tech companies & unicorn startups

  5. Cross-cultural competency promoting a congenial working environment

  6. Tech friendly government initiatives to promote the country as a global powerhouse

  7. Expansion in the export demand posing a one-step cost-friendly solution

  8. Leverage of round the clock (24-hour working cycle) to western countries due to Indian time difference

  9. Highly committed workforce to surpass your expectations

  10. Effective communication - English speaking population

The Contribution Of Indian IT Sector In The Offshore Software Development Services

Offshoring in India has posed a lot of underlying benefits. From low employment costs to affinity towards the English language, the creation of value-proposition via these projects has resulted in tremendous business opportunities in the long run.

Indian offshore development services have driven the world with their high-quality software solutions. Today, the IT sector has moved beyond the low operational costs onto becoming the fastest-growing sector globally. Just by going offshore in a country like India, the focus now stands on the digital transformation of your company based overseas.

With proactive engineers wanting to collaborate with you, you can save a lot from these economical deals. On average, foreign companies save up to 60% by offshoring to India. Tech cities like Pune give birth to top-level engineers every day contributing to the success of offshoring services in India. These tech experts direct your business models towards new technological advancements intending to break through the growth of your company.


1. What will be the future of the IT industry in India?

Indian IT industry will reach the $300-$350 billion annual revenue mark by the year 2025. On top of that, technological advancements in the field of cloud computing, IoT, robotics, blockchain, & others will take the industry in an augmented direction like never before. There’s no doubt about technology & innovation taking over drastically in the upcoming years to generate profits. What’s more crucial is the ability to analyze the implementation of certain technologies that can transform businesses in the most dynamic ways.

2. What is the future technology in the IT industry?

The evolution of the IT Industry also led to the ongoing technological advancements in the country. Since then, a growing number of tech trends in the years will be in the most demand considering the benefits that it will bring to meet the market requirements. Consequently, the following are the future technology trends in the IT industry -

  • Artificial intelligence

  • Machine learning

  • Internet of Things

  • Cloud computing

  • Robotics

  • Blockchain

  • Virtual & augmented reality

3. Which sector will grow in the next 10 years in India?

There are multiple sectors that are likely to grow in the next 10 years in India. These sectors include -

  • Information Technology

  • Pharmaceutical

  • Automobile

  • Food Industry

  • Infrastructure

The focus of the government on Digital India will also benefit IT companies in the long run. The hike of the industry will be primarily driven by the latest technological trends, world-class engineers, & government initiatives to support such advancements.

4. What is the reason for the growth of the IT industry in India?

There are various reasons behind the growth of technological pillars in the industry. The vast pool of dedicated proactive engineers along with the implementation of these technologies in the most dynamic way possible has contributed to the speedy growth of the IT industry. As India has become one of the world’s leading offshoring locations, read along to find out more about the reasons that brought such a hike -

  • Low operating & recruitment costs

  • Never-ending technological advancements

  • Robust IT infrastructure

  • Government initiatives

  • Committed workforce

  • Cross-cultural competency

5. What is India’s biggest advantage in the IT industry?

India is a country with a current population of around 1.4 billion people. The biggest advantage the IT industry has to offer is to be the largest employer in the country. The IT sector generates a lot of jobs for millions of skilled youths. With over 2.8 million employees working in the field, top IT powerhouses continue to flourish as the largest service providers.


Indian it industry future

The success of the Indian IT sector falls into the lap of various clicking factors that outperformed within its range. The core value proposition generated via these efforts has nurtured the upcoming Silicon Valleys of India. Yes, you got it right, there is more in the race than just one city! However, what determines the future of the IT industry is the everlasting effort to utilize the skilled resources to create high-quality software solutions.

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