The government is planning to provide incentives worth Rs 76,000 crore towards setting up over 20 semiconductor design, components manufacturing and display fabrication (fab) units over the next six years, in a bid to make India a hub for electronics.
“Through various PLI (production linked incentive) schemes, the Centre has tried to broaden the scope of manufacturing and export from India while the semiconductor policy will help deepen India’s manufacturing base,” a senior government official told ET.
The government’s target includes one to two fab units for displays, and 10 units each for designing and manufacturing components, officials added. Semiconductors are used for making a wide range of products ranging from automobiles to handsets.
The scheme is likely to go to Cabinet next week for approval and after that, the ministry of electronics & IT (MeitY) would work out the granular details and invite applications.
“…(after the Cabinet approval), the final contours of the policy will be drawn later and advertised, seeking interest from companies to invest,” another official said.
With the continuous advancement in technologies, enterprises have changed the way they used to operate. Businesses are leveraging the power of new-age technologies to create smart, secure, and connected products. In the last few years, India has witnessed tremendous growth in the IT services and product engineering space, driven by increased spending on tech innovation and industrial production.
According to a report by McKinsey & Company, the Indian IT industry is expected to reach about $300-$350 billion revenue mark over the next five years growing 10% a year compared to 7.5% per year in the last 5 years.
India has been the first choice for technology services providers across the world and is now a product engineering hub. India’s prowess in design and product engineering space will create a global brand as a country providing novel ideas and smarter products. Product engineering services encompass the use of various hardware, embedded, software technologies for design and development of products.
Major Drivers of Product Engineering Services In recent years the growth of product engineering services is bolstered by Rising demands for reduced time to market (TTM) Need for automation and Improving cost efficiencies
On the innovation front, the major growth drivers include new-age technologies like IoT, digital twins, cloud computing, edge computing, artificial intelligence, robotics, AR/VR, and 3D printing. Along with this, product and digital transformation across verticals including industrial automation, finance, healthcare, defense, and many more have boosted the product engineering services industry.
The product engineering market is growing at a rapid pace, as per a report by Data Bridge Market Research the product engineering services market will exhibit a CAGR of 10.36% for the forecast period of 2021-2028. This indicates that the product engineering services market will approach a huge value of $1935.10 billion by 2028.
Global Engineering R&D Market As per Zinnov, in 2019 the global spending on product engineering, also called Engineering R&D, was poised at $1.36 trillion in 2019, which is projected to grow at a CAGR of over 7% to reach $2.2 trillion by 2025.
ER&D Services Market in India India is among the largest exporter of ER&D services in the world. The recent NASSCOM report titled “Advantage India: Gateway to Global Engineering R&D and Innovation” projects the Indian ER&D services sourcing market to grow from $31 billion in 2019 to $63 billion in 2025 at a CAGR of 12%.
Despite the effect of the pandemic in the last 2 years, the ER&D exports from India continued to grow owing to the ease of doing business, IP protection, technical excellence, a large pool of engineers, demographic advantages, and quality infrastructure.
Indian Institute of Management Ahmedabad (IIMA), the global management institution, has partnered with Bank of America to launch a Centre for Digital Transformation (CDT). The Centre aspires to become a vibrant knowledge hub for academia, policymaking, and the private sector by facilitating cutting-edge research on digital transformation and innovation.
The Centre for Digital Transformation was launched with an event that was attended by faculty members of IIMA, along with well-known leaders from industry and academic institutions from India and abroad.
Announcing the launch of the Centre, Professor Errol D’Souza, Director, IIMA, said, “Advancements in the information technology sector are growing rapidly and transforming the way we function. The pandemic has further revealed the value of digital operating models and the need for industry, institutions, and nations to ramp up their adoption of technology. Therefore, it becomes imperative that we study the impact of this digital transformation on business, government, individuals and society.”
“Our global economy is quickly becoming more reliant on digital technologies as underscored by our current environment,” said Cathy Bessant, Bank of America Chief Operations and Technology Officer. “With the development of digital economies increasing at an exponential rate, shared learning and best practices are critical for shaping the future for our governments, industry and universities. It’s how we’ll ensure we’re creating and implementing technology responsibly.”
As a strategic next step, the Centre has also set up an Advisory Council on Responsible Digital Transformation. Helmed by IIMA, this council will bring together diverse stakeholders to deliberate on the urgent needs and unique perspectives on digitalization. This is intended to help develop best practices and guidelines designed to benefit all stakeholders and achieve broader goals. The council will play a critical role in enhancing core competencies of the Centre and help guide the projects. The council will enable greater collaboration and alignment with external industry partners for long term value creation.
The council members include Dr. Ritu Agarwal, Senior Associate Dean of the Robert H. Smith School of Business at the University of Maryland; Debjani Ghosh, President of NASSCOM; Rajesh Gopinathan, CEO of Tata Consultancy Services; Nandan Nilekani, Non-executive Chairman of Infosys; Aditya Puri, Senior Advisor, The Carlyle Group; Dr. Vallabh Sambamurthy, Albert O. Nicholas Dean of the Wisconsin School of Business of the University of WisconsinMadison.
“Over the last decade, the Indian government has empowered citizens to access social security, financial products, education and health services using digitization as the key enabler,” said Kaku Nakhate, India Country Head, Bank of America. “Bank of America is a key supporter of these initiatives, and this new Centre will only strengthen the responsible digital framework in India. I am delighted that this Centre will bring together leading academics and digital thought leaders from the United States and India to accelerate the digital revolution in India.”
Advisory Committee Members: The advisory committee of the Centre is jointly chaired by Cathy Bessant (Chief Operations & Technology Officer, Bank of America), and Founding Chair Dr. Pankaj Setia (Professor of Information Systems, IIMA). The other members of the advisory committee include Professor Errol D’Souza (Director, IIMA); Sumeet Chabria (Global Technology & Operations COO and Global Business Services Executive, Bank of America); Dr. Debjit Roy (Professor, IIMA); and Dr. Ramayya Krishnan (Dean of Heinz College, Carnegie Mellon University).
“We are delighted to have Bank of America on board to collaborate with us in setting up the Centre,” added Professor D’Souza. “We are also appreciative of the group of eminent leaders who have joined our Advisory Council for Responsible Digital Transformation to guide us as we embark on this ambitious initiative”
Outlining the Centre’s objective and activities, Professor Pankaj Setia, Founding Chair, Centre for Digital Transformation, IIMA said, “The Centre of Digital Transformation aims to engage in various activities that guide thought and action in the digital era. Specifically, the Centre will focus on activities that enhance an understanding of the digital ecosystem and catalyse leadership, as it leverages its expertise in research and development to provide thought leadership for digital transformation.”
Supported by a high calibre faculty pool and strong research credentials, IIMA has been at the forefront of leading initiatives that have the potential to educate and influence scholarship, practice, and policy. The Centre for Digital Transformation is the ninth research centre to be set up at IIMA. The Institute has taken up the challenge of professionalizing management in several other priority sectors by setting up a number of sectors or mission-oriented thrust groups termed ‘Centres’ to apply management science to other sectors of the economy.
Bank of America’s responsible growth strategy is the foundation and driving force behind its approach to the development, use and responsible deployment of technology, including data and artificial intelligence. Partnerships like this one with IIMA ensure a diverse set of inputs and experiences which guide and evolve that responsible approach both now and in the future.
India is emerging as a global IT superpower, asserting its digital sovereignty with firm measures to safeguard data privacy and online rights of citizens.
India has made it to the top 10 in Global Cybersecurity Index (GCI) 2020 by ITU, moving up 37 places to rank as the tenth best country in the world on key cybersafety parameters. The affirmation by the UN body of India’s efforts on cybersecurity, comes just ahead of the sixth anniversary of Digital India on July 1. India is emerging as a global IT superpower, asserting its digital sovereignty with firm measures to safeguard data privacy and online rights of citizens.
As per the ranking, India has moved up by 37 places to rank as the tenth best country in the world in the Global Cybersecurity Index (GCI) 2020 launched by the International Telecommunication Union (ITU) on June 29, 2021. The US topped the chart, followed by the UK and Saudi Arabia tied on the second position, while Estonia was ranked third in the index. India has also secured the fourth position in the Asia Pacific region, underlining its commitment to cybersecurity.
GCI assessment is done on the basis of performance on five parameters of cybersecurity including legal measures, technical measures, organisational measures, capacity development, and cooperation. The performance is then aggregated into an overall score. For each of the five aspects, all the countries’ performance and commitment were assessed through a question-based online survey, which further allowed for the collection of the supporting evidence. Through in-depth consultations with a group of experts, the questions were then weighted and assessed, to arrive at the overall scores.
The GCI results for India show substantial overall improvement and strengthening under all parameters of the cybersecurity domain. India scored a total of 97.5 points from a possible maximum of 100 points, to make it to the tenth position worldwide in the GCI 2020.
India has worked relentlessly on all the five pillars over the last few years, resulting in significant improvement in its ranking in Global Cyber Security Index.
The Department of Telecommunication on Wednesday further liberalised the guidelines for Other Service Providers (OSPs), enabling business process management (BPM) firms’ employees to work from home and provide voice-based services in India and abroad.
The government has removed the distinction between domestic and international OSPs, which means a BPM centre with common telecom resources will now be able to serve customers located worldwide including in India. It also means interconnectivity between all types of OSP centres is now permitted.
“In order to encourage our BPO industry, OSP guidelines that were liberalised in November 2020 have been simplified even further, offering greater ease of business and regulatory clarity. This will further reduce compliance burden and help our tech industry,” Prime Minister Narendra Modi tweeted.
The guidelines issued in November 2020 had reduced the compliance burden of the BPM industry.
“The BPM industry revenues grew from $37.6 billion in 2019-20 to $38.5 billion in 2020-21, despite the pandemic. This was largely possible due to the industry’s ability to work remotely and majorly enabled by the Government of India’s relaxations of WFH requirements under the OSP regime, first temporarily, in March 2020 and then complete reforms under the new guidelines in November 2020,” the Department of Telecom said in a statement.
Now, EPABX (Electronic Private Automatic Branch Exchange) of the OSP can be located anywhere in the world. OSPs apart from utilising EPABX services of the telecom service providers can also locate their EPABX at third-party data centres in India.
It also allowed a BPM employee sitting anywhere to now connect directly with the centralised exchange of the customer using any technology including Broadband over wireline/ wireless.
The government has removed restrictions for data interconnectivity between any OSP centres of same company or group company or any unrelated company. It also removed penalties for violations.
“The remote agent to directly connect to centralised system of OSP or customer will help avoid a double hop. Inter-connectivity between OSPs will allow seamless services. Centralised internet connectivity using MPLS/SD-WAN will provide much needed flexibility. While use of third party hosted for a full set of services has not been permitted, but allowing own EPABX in 3rd party data centre or entire suite of service from telecom providers will allow industry to focus on their core work. Combined with the first set of OSP reforms in November 2020, this is a significant ease of doing business reform for the industry,” said Ashish Aggarwal, senior director and head – public policy, at industry body National Association of Software and Services Companies.
The registration requirement for OSPs has also been done away with altogether. There are some security related obligations for voice based OSP. The BPM industry engaged in data-related work has been completely taken out of the ambit of the definition of an OSP.
The issue of OSP guidelines dates back to a clause in the earlier telecom policy under which certain kinds of work (such as voice calls) could not be shifted to employees’ homes. However, last year, given the lockdowns in both India and client locations, the industry lobbied hard to have some of these guidelines simplified.
As a precautionary measure to contain the spread of Covid-19 and ensure business continuity, Nasscom had asked the DoT to relax restrictions around work from home for IT / ITeS employees, guided by the OSP regime.
French President Emmanuel Macron, Spanish PM Pedro Sánchez will also address event Prime Minister Narendra Modi will deliver the keynote address at the fifth edition of VivaTech, one of the largest digital and start-up events held annually in Paris, on Wednesday.
“The Prime Minister has been invited as a Guest of Honour to deliver the keynote address at VivaTech 2021,” per an official release issued by the Ministry of External Affairs (MEA). The event will be held on June 16-19.
Other prominent speakers in the event include French President Emmanuel Macron, Spanish Prime Minister Pedro Sánchez, and Ministers and MPs from various European countries.
Representatives from top corporates such as Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Microsoft President Brad Smith are also scheduled to attend the event, the release added.
VivaTech, which started in 2016, is jointly organised by advertising & marketing conglomerate Publicis Groupe and a leading French media group Les Echos. It brings together stakeholders in technology innovation and the start-up ecosystem and includes exhibitions, awards, panel discussions, and start-up contests.
The Indian data centre sector is thriving. As per a report by Arizton Advisory and Intelligence the Indian data centre market is estimated to grow at a CAGR of close to 12% between 2020-2026. The country already has over 75 colocation data centres run by 20 data centre providers and more entrants are lining up. The three states attracting the most foreign investment are Maharashtra – the country’s data center hub, Tamil Nadu and Uttar Pradesh. The new facilities will be large, spanning over 100,000 square feet, catering to all the new demand that is being generated due to a massive corporate need to move operations online and the average individual’s increased data consumption.
The data centre segment is an extremely capital intensive one and payback periods are long. Thus, even going forward, it is large players with deep pockets who will thrive in this space. While we already had large corporate players like Yotta and AdaniConnex operating in India, global companies like NTT, Equinix and Iron Mountain have entered the country via acquisition mode. In the cloud segment, AWS, Azure and Google have fuelled the underlying data centre industry creating a more customer centric approach.
“In the next 5-7 years, we will witness a heavy dose of investment in terms of capacity building. However, as more and more players come in, there are chances of supply exceeding demand,” says Sunil Gupta, Co-Founder & CEO, Yotta Infrastructure Solutions.
AWS, which has a 59% market share in 1H20 in the Cloud Infrastructure as a service (IaaS) market, is committed to heavily investing in India in the coming years. In November 2020, the firm announced its plans to launch AWS Asia Pacific (Hyderabad) Region by mid 2022. This will be the company’s second region in the country after the launch of the Mumbai Region in 2016. Higher fault tolerance, lower latency, addition of new Edge locations and AWS Direct Connect locations is a priority for the firm. More Direct Connect locations means more customers can transfer their data to AWS directly from their data centres through dedicated private network connections.
While the cloud infrastructure available in the country is top notch, it is adoption that needs to pick up.
“Our mission in India is to empower builders and businesses to build a better India and we want to be a force that moves India forward. Our strategy is not to acquire innovations, but to build it. We hire builders who look at customer experiences that are not working, then figure out how to reinvent those,” says Puneet Chandok, President, Commercial Business – AWS India & South Asia, AISPL.
When companies look for a cloud infrastructure partner, they are looking for one that can innovate with them. That’s exactly what a CLM firm like Icertis looks for. And “Contract Intelligence” is riding the same growth wave that the data centre industry is.
“The underlying impact of data governance and data residency regulation in India, underscores the need for an enterprise contract management system for all enterprises. The role of contracts in business processes is redefining the way companies do business,” says Monish Darda, Co-Founder & CTO, Icertis.
For Micron, a leading player in the memory and storage solutions space, it is the work-from-home culture and high e-commerce activity that have fuelled growth. Revenue for the Compute and Networking Business Unit was close to $2.6 billion, up 34% in Q2 of 2021. Enterprise demand has started to come back and the expectation is it will only strengthen as the year goes along. The company believes that even in the long term, AI and data-centric workloads will drive growth and memory and storage will become an increasing portion of server BOM cost.
“The opportunity for tapping intelligence from data is spurring unprecedented innovation within the technology arena. The challenge is to increase memory bandwidth and reduce latency of data delivery to compute to speed insight at scale.” says Anand Ramamoorthy, MD, Micron Technology (India).
Dell Technologies, which emerges as the top vendor in India in the mainstream server market with a revenue share of 40% as per IDC in Q4 2020 says it is going beyond physical servers to cater to the growing needs of its customers. Increasingly, with hyper-converged infrastructure based data centres, networking and 5G deployment, the software stack built on physical servers and its contribution to analytics is becoming immensely important. Dell Technologies is taking these trends into consideration and offering its clients cyber resilience, a simple journey to hybrid cloud and the ability to tailor their infrastructure to their needs. It’s even helping key data centre players design, build and scale their infrastructure.
“Data and monetization of data have become the key driver for digital transformation. This has made it essential for businesses to harness valuable insights from data. Our PoweEdge portfolio provides virtualization and the power needed to gain and act on real-time insights from data wherever it may reside – from core data centers to public clouds and edge locations,” says Alok Ohrie, President and MD, Dell Technologies India.
Hitachi Systems Micro Clinic, which is a leading systems integrator, is expecting its business to grow 25% yoy. The firm has a large clientele spread across public sector banks, insurance companies, telecom companies, logistics, IT/ITES firms and pharma and healthcare companies. Even though India’s current data centre space is dominated by large players like Amazon and Google, there is plenty of opportunity to grow in the area of helping customers manage application workloads and infrastructure. For Hitachi Systems Micro Clinic, strategic collaboration is a key go-to-market strategy.
“India is poised to become the potential data centre hub of the world. More recently, the data centre industry is innovating to support customer business by offering infrastructure-as-a-service, storage-as-a-service and backup as a service. The growth of the industry will be driven by rapid adoption of IT services and Hybrid business models which encourage businesses to acquire data management capacities to handle huge volumes of data and government regulations,” says Anuj Gupta, CEO, Hitachi Systems Micro Clinic.
For Yotta Infrastructure, which is part of the Hiranandani group, the growth plan is to capture 20-25% market share in the next few years. The combined capabilities of a Developer Company (DevCo), Power Company (PowerCo), and Operating Company (OpCo) put Yotta in a unique position. The firm is focusing on scalability and spreading its footprint across the country. In fact, in addition to Mumbai, it’ll soon be operational in Chennai, Delhi and Kolkata. With a Rs. 7000 crore investment to set-up a 20-acre hyperscale park in Noida, an MoU with the West Bengal government and campuses in Chennai and Maharashtra, their expansion plans are set.
“The enterprise sector and startups both need everything-as-a-service. Most companies have moved away from colocation and there will be a demand for players who provide a whole range of cloud and managed services. The government has been supportive and MeitY is consulting with all stakeholders but ultimately majority of this sector’s requirements have to be catered to by the state governments and not the central government. They have already taken cognisance of our demands like land allocation, lower taxes and distribution of power at a cheaper rate,” says Sunil Gupta, Co-Founder & CEO, Yotta Infrastructure Solutions.
This speed of digitization is also impacting other businesses. For instance, it has fuelled insights-driven BPM solutions to help identify and reach customers across different platforms. NYSE listed Startek which employs over 18,000 people across 16 BPM centres in India believes that when the business processes run on a cloud, IT/ BPM providers can be more innovative and offer CX-as-a-Service with much lower CAPEX and OPEX.
“The cloudification of BPM makes the best use of virtualization to enable elasticity, security and improve economies of scale. We have migrated over 55% of our global workforce to the WFH model with maximum performance and AI-driven productivity controls,” says Aparup Sengupta, Executive Chairman and Global CEO, Startek. In November 2020, MietY released a draft policy which will give the data centre sector – infrastructure status. However, some firms in this sector expect that the status won’t be awarded in the next five years. There are also challenges around having a skilled workforce and getting adequate investment to set up data centres especially for MSMEs and startups. But overall, both the private sector and the government have taken many steps in the right direction.
The world is experiencing a massive shortage of semiconductors that are the foundation of our modern-day life. It seems to be a perfect time for India to attract global semiconductor firms to set up business here.
The Indian Government is reportedly working on a plan to offer around $1 billion in cash to every company that sets up a chip manufacturing unit in India. It may sound like an incentive enough, but semiconductor firms are not so easily swayed.
A case in point is the Government’s efforts to attract semiconductor firms in 2013 by offering zero customs duty on importing parts and machinery required for semiconductor facilities. Unfortunately, this didn’t appeal to the chip makers.
In December last year, the Government of India invited Expression of Interest from companies and consortium looking to set up new semiconductor units. Clearly, the country wants to build on the success of the Production-Linked Incentive scheme, which has led to a significant increase in device manufacturing. The chip-making capability will help India in climbing the value chain and also lead to the creation of jobs. The deadline for EOI was April 30, 2021, but there is no news whether the Government has received any interest from chipmakers.
Why is there a global shortage?
The global shortage, resulting from a surge in demand for electronic items after the outbreak of the COVID-19 pandemic last year, is pushing several countries to have their own chip-making facilities to bring down their dependency on the global supply chain. Pandemic led to an increase in worldwide chip sales from $412.2 billion in 2019 to $439 in 2020. Just the semiconductor sales in December 2020 were up by 8% when compared with December 2019. The COVID-19 pandemic also broke the supply chain and led several firms to hoard the raw material required to manufacture chips.
The global semiconductor industry is dominated by the US, South Korea, Japan, and Taiwan. The US leads the market with a 47% share, followed by South Korea at 19%. On the other hand, Japan and the European Union boast of a 10% market share each, and Taiwan and China have 6% and 5%, respectively, as per the recent Semiconductor Industry Association data.
Right from our mobile devices, gaming consoles, cars, televisions to consumer goods are powered by the semiconductor. This, coupled with the fact the global semiconductor supply chain was severely disrupted last year after the outbreak of the COVID-19 pandemic, means that a country must have its own chip-making facilities.
The demand for semiconductors is booming in India. To begin with, India is the second-largest smartphone manufacturer in the world after China, and chips are at the center of these devices. Further, several new-age technologies, like 5G, Internet of Things (IoT), and artificial intelligence (AI), are likely to drive the demand for chips in the years to come. In this context, it makes absolute sense to become Atmanirbhar (self-reliant) in this segment.
India consumed around $21 billion worth of semiconductors in 2019, according to India Electronics and Semiconductor Association (IESA). The consumption was growing at the rate of 15.1%.
What further works in India’s favor is that a lot of chip designing is already happening here. While several firms, including Texas Instruments, NXP Semiconductors, MediaTek, AMD, have been designing chips in India, they don’t manufacture in the country.
The Indian government has taken its first big step towards regulating big tech platforms. The government’s new Intermediary Guidelines for the Information Technology Act (IT Act) place certain restrictions on platforms and how they function in India. Mint explains.
What are these new intermediary rules?
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, are formed to regulate tech platforms operating in India. These will supersede the policies of platforms, which will have to comply with the new rules. These rules, along with the upcoming Personal Data Protection (PDP) Bill and an expected law on cybersecurity, will determine how the internet and internet-based companies function in the country in future.
They also indirectly regulate what you can or cannot do, see or access through internet. In essence, they will determine the future of the internet in India.
How do they affect users and platforms?
Platforms will have to review their own policies and ensure they comply with these rules, and more that may follow with the PDP Bill. In some cases, they will have to review their algorithms to ensure compliance, which could lead to higher research and development (R&D) costs. Platforms that don’t draw significant revenue from India could also choose to leave the country, instead of complying. For users, it would mean regulations over what they say or do on the internet. Their activities will be under greater surveillance, and there have been concerns about misuse by both platforms and the government.
Social media platforms continue to face criticism for invading users’ privacy
What are the rules written under these guidelines?
Social media platforms must put grievance redressal officers and trace content to first originator within India. A Code of Ethics and Procedure and Safeguards in Relation To Digital/Online Media has been put in place. Digital media will have to follow the Journalistic Conduct of the Press Council of India and the Programme Code under Cable TV Networks Regulation Act.
What specific rules are being criticized?
One of the primary concerns is that encrypted messaging apps will need to collect more user data to trace messages back to the first originator. This also conflicts with extraterritorial jurisdiction norms made in the IT Act. The new rules could get people into trouble even if they share a tweet/message that originated outside India, thereby shooting the messenger instead of the actual creator. Experts have said the IT Act should not apply to news media and putting them under the same norms could lead to unfair censorship of news.
Will messaging apps get access to chats? Not necessarily. While it does mean apps will have to collect more data, experts said there are ways to ‘fingerprint’ each text, by which you can reach the first originator of a text without reading its content. Think of it this way, the police lawfully confiscates a phone, reads a text and then asks an app to find the first originator of the text. The app uses the fingerprint of that message to see where it started. This is technically possible and apps can do so without needing to read the text.
Mumbai: The National Association of Software & Services Companies (Nasscom) has projected a 2.3 per cent revenue growth in FY21 for the country’s information technology industry despite the pandemic. Nasscom has pegged the Indian IT industry’s revenue during the current financial year at $194 billion, up from $190 billion in FY20.
Compared to previous years when the industry registered a growth of 6 to 7 per cent, the current numbers are subdued.
Although several players faced pricing pressure as the global economy contracted, the Indian IT services segment is set to grow 2.7 per cent to $99 billion, according to the latest numbers. Growth was driven by the e-commerce sector that grew 4.8 per cent to $57 billion, followed by a 4.1 per cent growth in the hardware segment that touched a revenue of $16 billion on a year-on-year basis. Exports are expected to touch $150 billion for FY21.
In terms of outlook, though Nasscom has stopped giving any revenue guidance, its CEO Survey for 2020-21 has indicated a better economic growth and increased tech spends.
About 97 per cent of the CEOs polled expect global economic growth to be better than 2020 and 71 per cent CEOs expect global technology spend to be significantly higher.
The IT industry accounts for 8 per cent of the country’s GDP, contributes to more than half of services exports and 50 per cent of the foreign direct investment.
“The year 2020 turned out to be stress test of our resilience. Many analysts were sure that the Indian IT industry will not be able to come out of this, but we have not only recovered but have also managed to stay relevant to our clients and have emerged as bellwether in an economy hit by Covid,” said Nasscom president Debjani Ghosh.
On the back of a strong recovery in the second half of FY21, increased digital focus and tech spending, the overall deal pipeline is at a robust $15 billion, according to the industry lobby group.
Despite the downturn, Indian tech industry continues to be a net hirer with significant focus on digital up-skilling. The industry is expected to add over 138,000 net new hires in FY21, taking the total employee base to 4.47 million. The digital talent pool is expected to cross 1.17 million, growing at 32 per cent over the last year.
The strategic review also pointed out that there has been a 10 per cent shift to outcome-based pricing, with about 4 per cent offshore shift in 2020 against 2019.
Nasscom chairman U B Pravin Rao said the hybrid work model was here to stay. “Even today, everyone is working from home. But what we have managed to showcase to clients is that though our worforce are working from home, we have not compromised on security and rather maintained all the parameters. That has given them confidence that work from anywhere can be worked out,” added Rao. The industry body is working on a framework on hybrid workforce including on tax implications for the people working from home.
As per a Nasscom survey, while 97 per cent CEOs anticipate a significantly better global economic growth in 2021, 95 per cent expect hiring to be more than last year. Further, 67 per cent CEOs believe the Indian technology industry would grow significantly higher than 2020 and 70 per cent expect to have higher prevalence of remote work along with boost in gig workforce in 2021.
“Digital transformation is the topmost priority for global corporations and in a highly connected world that will remain largely contactless for an extended period, there are shifts in business models, customer experience, operations, and employee experience,’’ the report said. Up to 28-30 per cent of the industry revenues was recorded for digital.
The Indian domestic market, driven by hardware-led demand, continued to show resilience, growing at 3.4 per cent in the year. With an increased focus on innovation, India witnessed more than 115,000 tech patents filed by companies in India in the last five years.
The industry witnessed 146 M&A deals in 2020, 90 per cent of which were digitally focused.
Companies saw a significant rise of 80 per cent in cloud adoption during the first half of this financial year against the second half of the previous year. Continental Europe and Asia-Pacific (APAC) emerged among the strongest growth geographies in FY21. In terms of sectors, banking and financial (BFSI) and healthcare were among the key growth verticals during the year.