India Software Services Export Industry Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

India Software Services Export Industry Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The India Software Services Export Industry Market size is estimated at USD 145.03 billion in 2023, and is expected to reach USD 180.99 billion by 2028, growing at a CAGR of 4.53% during the forecast period (2023-2028).

As the cloud transformation in the North American and European nations involve high costs and lacks proper resources, India is preferred as it is at the forefront of offshoring and outsourcing, and it is updated with emerging trends, techniques, and technology. Thereby contributing to the market growth during the forecast period.

Key Highlights

• Rapidly increasing digital transformation across industries, adoption of new technologies such as artificial intelligence, IoT, and blockchain, and a growing emphasis on leveraging the core competencies by outsourcing non-core operations are the major driving factors of the market.
• The growing migration to cloud services is a key driving factor in the market studied, resulting in significant collaborations and generating revenue. In September 2022, Tata Consultancy Services assisted Penumbra, a US-based multinational healthcare organization with a focus on advanced technology, in successfully completing the first stage of its cloud transformation journey by envisioning its order management, finance, and procurement processes with a new digital core.
• The Indian National Policy on Software Products has been addressed partly by the Next Generation Incubation Scheme (NGIS), which has been approved to support the software product ecosystem. It is planned to build a thriving software product ecosystem to support the strong IT sector's sustained expansion, new job creation, and competitiveness improvement.
• Regulatory pressures are intensifying along many industry supply chains. Climate change-related environmental concerns, globalization and the ensuing need to track, satisfy, and verify compliance with regulations from multiple locations, and mass customization, which requires regulatory compliance for an ever-increasing variety of products in an ever-smaller variety of lots or batches, all add to these pressures. Under these circumstances, manufacturers want compliance management software that delivers the appropriate data at the precise moment and in the manner required, in accordance with the most important quality requirements. While some manufacturers and industries have met these needs with paper-based or in-house compliance software solutions, an integrated compliance software solution is now essential to satisfy the rising demands caused by expanding regulatory complexity. This is expected to hinder the market growth.
• Due to the COVID-19 pandemic, several businesses have employees working from home, and the need to adopt efficient IT systems has increased substantially. Organizations have increasingly migrated to the cloud or cloud-based platforms for their applications and software. This situation augmented the market growth.

India Software Services Export Market Trends

Increasing Demand For Infrastructure Modernization, Digital Support, and Cloud Services Owing to New Pandemic Challenges

• The recent COVID-19 outbreak has shown how vitally all levels of government need to advance digital transformation. Governmental organizations are better positioned to support citizens by demonstrating agility, scaling for operational resilience, and gaining actionable information more rapidly and confidently.
• The COVID-19 restrictions did not significantly affect the IT sector. The demand for competent IT solutions increased as firms opted for work-from-home networks to maintain their operations. Over the past two years, there has been an increase in the demand for high-quality IT products. The remote work environment created the demand for better software, and this provided various growth opportunities for software developers.
• The National Association of Software and Services Companies (NASSCOM) recently released a study that projected Indian IT services revenue reached USD 194 billion by the end of the fiscal year 2020–21, representing a 2.3% growth from the previous year. Positive government actions and policies, FDI inflows, a robust digital transformation, higher IT spending, etc., have contributed to this growth. Additionally, the BFSI, telecom, and healthcare sectors have been particularly lucrative for IT companies.
• Further, with remote workforces, the pandemic highlighted the importance of cloud computing, prompting businesses to implement online productivity and collaboration tools. The cloud has grown to be crucial to organizational growth and business continuity. Services exports will only rise in response to the recession in developed economies. Various countries like the United States have been exporting their work to reduce costs.
• According to a poll by Yotta Data Service Pvt. Ltd, approximately 37% of Indian firms had their digital infrastructure in the cloud in 2020. It is expected that by 2022, more than 60% of infrastructure will be in the cloud at the expense of third-party co-location and on-premise or captive availability.

IT Services Expected to Capture Major Market Share

• Many countries have long exported IT work to developing economies, such as India, to save on labor costs. With the country housing many major IT service export players, the demand for IT services export is expected to gain significant momentum in the coming years.
• Further, in the wake of digital transformation worldwide, companies are rapidly upgrading their legacy IT infrastructure, thus creating demand for IT consulting and implementation services. Digital transformation provides companies with a strategic and competitive advantage in determining IT Services and their importance, and further organizes the IT services as an activity of plan-build-run framework and defines IT Service strategy to the organization.
• In addition, companies that choose IT consulting operations can keep 24-hour customer service and technical support lines open and operate with professionals in different time zones than the customer calling in the complaint. The landscape of IT services is changing rapidly. The proliferation of advanced technologies, like big data and machine learning in various end-user industries, fuels the need for updated IT infrastructure. Enterprises across different end-user verticals need help to balance their IT infrastructure and cost management. In addition, the adoption of emerging technologies that are expected to grow exponentially as businesses look to replace outdated infrastructure. The need to replace obsolete hardware is another factor driving the IT services segment's growth.
• The IT service providers are indulging in partnerships with various end-user companies to assist them with advanced technologies implementation. For instance, in February 2022, Infosys, a global leader in next-generation digital services and consulting, collaborated with Qualtrics, the leader and creator of the Experience Management (XM) category. Infosys has established a Qualtrics center of excellence to bring solutions on Qualtrics to the market. These solutions are a part of Infosys Cobalt cloud offerings and help clients improve their customer, employee, and supplier experiences.
• According to Invest India, the business process management industry in India is significant because it is one of the largest outsourcing destinations for various IT organizations throughout the world. In the fiscal year 2022, the information technology sector contributed around 7.4 % of the country's GDP. BPM is more of a discipline than a process because it includes methods for improving, analyzing, automating, and improving business processes.

India Software Services Export Industry Overview

The Indian software services export industry market is fragmented. Tata Consultancy Services Limited, Infosys Limited, Wipro Limited, HCL Technologies, and Tech Mahindra Ltd are among the major companies. The corporations continue to innovate and form strategic partnerships to maintain their market share.

• Spetember 2022: Wipro Limited and Finastra, a global provider of financial software applications and marketplaces, stated that they would help corporate banks hasten their digital transformation using Finastra's market-leading solutions. This agreement offers cutting-edge API-enabled platforms enabling banks to innovate, streamline, and digitize crucial trade finance processes while reducing overhead costs thanks to Finastra's cutting-edge solutions and Wipro's expertise in consulting digital, infrastructure, and operations. Due to this multi-year partnership, Wipro became the only implementation and go-to-market partner for all Indian banks using Finastra's Fusion Trade Innovation and Fusion Corporate Channels. Wipro is one of Finastra's top international partners for its cash and liquidity management products.
• July 2022: Move Works, the AI platform, and Tata Consultancy Services joined to create workplaces. Due to this partnership, joint clients started offering staff assistance in any language, at any time, and from any location. The technology used by Move Works and its clients may be relied upon by clients to support staff automatically.

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