Digital deals, R&D spends assist IT sector clock 15.5% growth in FY22 By CIOTechOutlook Team

Digital deals, R&D spends assist IT sector clock 15.5% growth in FY22

CIOTechOutlook Team | Wednesday, 01 February 2023, 02:53 IST

The growing emphasis on the digitization of services and India's emergence as a major "powerhouse" for engineering research and development (ER&D) activities by international multinational firms helped the Indian IT–business process management (BPM) clock 15.5% growth on year for FY22.

In contrast, the fiscal year 2020–21 saw 2.1% growth.

As per sources for the years 2022–2033, Covid-19 has sped up the pace of digital transformation across the majority of India's end-user industries, with businesses witnessing an increase in investment, more complex technology convergence use-cases, and the prioritisation of enterprise-scale data and cloud strategy.

“Global capability centres in India are increasingly performing complex R&D functions and are leveraging futuristic technologies and developing digitally innovative products as well building either the largest or the second-largest ER&D hubs in India,” the survey noted.

Additionally, from about 26-28% in FY20 to 30-32% in FY22, digital revenue as a percentage of total revenue has grown.

Based on the poll, the sector as a whole experienced double-digit revenue increase for the entire year. Due to the increased reliance of businesses on technology during the pandemic and the introduction of cost-saving type of deals, IT services make up the majority share of the IT-BPM sector with over 51% of sales, and exports, including hardware, saw a growth of 17.2% in FY22 compared to 1.9% growth in FY21.

In terms of export destinations, the US held the top spot with a 62% share, followed by the UK with 17%.

Despite worldwide constraints brought on by the pandemic and low tourism receipts, India continued to dominate the international services trade in FY22, according to the report. India's service exports reached $254.5 billion in FY22, up 23.5% year over year. Together, software and business services made for more than 60% of all exports of services from the nation.

The government has also highlighted a sharp rise in the number of patent applications, with over 138,000 filings between 2015 and 2016—a 46% increase in that time. Additionally, over 85,000 applications were filed in emerging technologies, showing India's transition to a knowledge-based economy.