Tech Industry is Responsible for 8% of Indian GDP: What will grow in 2023?

Tech Industry

Tech Industry

Here’s what challenges Tech Industry is facing which led to 8% of Indian GDP

The Indian technology industry has grown significantly over the last thirty years. In 2013, it accounted for approximately 8% of India’s total Gross Domestic Product (GDP). The GDP increased by 9.5% between 2014 and 2015. Since then, the technology industry has ranked among the top five most significant in the country. The Indian IT industry employed approximately 4 million people in 2017, up from 170k in 2016. The majority of these job opportunities came from large corporations. Tata Consultancy Services, for example, employs over 275k people, while Infosys employs over 156k. Despite its expansion, the industry has faced several challenges. As a result, the industry has seen many ups and downs. For example, the National Association of Software and Services Companies (NASSCOM) reported in 2018 that the IT industry in India only grew by 5%, while employment fell by 40% between 2014 and 2017. Even in 2022, the situation is the same. The Indian IT sector is expected to grow at a rate of 21.2% by 2021. However, due to a variety of factors, it is only expected to grow at a slower pace of 7.7% in 2022.

 

Economic Downturn

The majority of Indian tech industry clients are from the United Kingdom, the United States, Canada, and Spain. In recent years, there has been a global economic slowdown, which has impacted these countries. As a result, leaders in the IT industry are witnessing a rise in geopolitical tensions, rising inflation, and concerns about a possible recession. Jayanth Kolla, co-fa ounder of market research firm Convergence Catalyst, believes that large IT companies’ multi-billion-dollar multi-year tech projects will slow. Kashyap Kompella, CEO and Founder of RPA2AI Research, also advised the industry to anticipate a 10% to 15% decrease in overall IT spending. The Indian technology sector has begun cost-cutting measures in response to the situation.

 

Global Competence

In 2021, the global IT market was valued at around $8,384.32 billion, with a projected increase to $9,325.69 billion in 2022. While the Indian market is expanding, it is still not among the largest in the world. Many IT companies worldwide are accelerating their growth by improving their services and releasing more innovative products and services. As a result, there is a battle going on between companies to maintain their competitive edge in the global market. The competition is especially visible among gaming studios that create localized games. For example, there are numerous Andar Bahar games available online. Even though this is an Indian game and the majority of the players are Indians, many foreign gaming studios create these games.

 

Scarcity of Talent

According to reports, India has over 1.67 million app developers and will have the largest developer population by 2024. Despite this, recent surveys by DigitalOcean Holdings and NASSCOM revealed that the Indian tech industry talent shortage may worseshortlyre. Many of the country’s developers are leaving for Southeast Asia and other parts of the world in search of better opportunities.

 

A Bad Reputation

A US Court fined Tata Consultancy Services $420 million in 2016 after it was accused of illegally extracting confidential information, trade secrets, and data belonging to Epic. In addition, Infosys paid a $1 million fine for violating US visa and immigration policies. The Indian IT behemoth has been accused of hiring non-US citizens in New York without paying wages or taxes. As previously stated, Infosys and Tata Consultancy Services are two of India’s largest IT firms. Their involvement in such situations tarnishes the Indian technology industry in the global market.

 

Bridging the Rural-Urban Population Divide

With approximately 67% of Indians living in rural areas, it has become necessary for technology companies to bridge the rural-urban divide. According to Kantar IMRB ICUBE, there are currently approximately 200 million internet users in Indian rural areas. However, there is a disparity in consumption habits between rural and urban demographics. To meet the market’s various needs and demands, Indian technology companies must personalize their services to each demographic