Indian tech industry crosses $200 bn in revenue, aims to clock $350 bn by FY26

The Indian technology industry crossed the $200-billion revenue mark, touching $227 billion in revenue during FY22, according to Nasscom’s Strategic Review 2022 released on Tuesday.

Further, with $30 billion of incremental revenue and an overall growth rate of 15.5%--its highest-ever since 2011, the industry has set itself an ambitious target to touch $350 billion in revenue by FY26, growing at a rate of 11-14%, the report added.

All sub-sectors of the industry recorded double-digit growth. Exports (including hardware) recorded a growth of 17.2% clocking revenue of $178 billion which is over 51% share of India’s total services exports.

To be sure, India’s massive digital infrastructure played a key role in driving India’s tech adoption with public digital platforms becoming the bedrock of India’s digital advantage. Propelled by this enhanced domestic demand, the domestic revenue of the technology industry recorded a 1.2X growth over FY19 to reach about $50 billion. 

E-commerce recorded a growth of 39% to reach $79 billion in FY22. Digital revenue share stood at 30-32%, recording an incremental revenue of $13 billion in FY2022.

“Fiscal 2022 has been a breakthrough year for the Indian technology industry. We’ve posted solid, broad-based growth, massively increased jobs, and are proud that we continue to be an engine for India’s economic growth, and a beacon for inclusion and diversity. We are excited about the opportunities in the Techade as we enter an era of exponential transformation and technology becomes indispensable to progress. We remain committed to catalysing the trillion-dollar digital economy with our focus on talent, technology, collaboration, and innovation,” said Rekha M. Menon, chairperson, Nasscom.

India has also emerged as a global hub for digital talent with over 5 million tech workers, according to the report. The industry recorded nearly 10% estimated growth in direct employees in FY22 with a highest-ever net addition of approximately 450,000 to its employee base.

With over 36% of women employees, the Indian tech industry has also become one of the largest private-sector women employers in India with over 1.8 million women in the workforce.

Further, with one out of three employees already digitally skilled, the digital tech talent pool is at 1.6 million, growing at a CAGR of 25%. With massive focus on reskilling and upskilling, the Indian tech industry reskilled approximately 280,000 employees in FY22.

The Indian technology industry has emerged as a digital tech hotbed with 30-32% revenues emanating from the digital stream and over 66% of deals largely digital. The industry also undertook over 290 mergers and acquisitions (M&As) with their primary focus as digital. 

India, meanwhile, continues to be the third largest startup hub in the world with over 25,000 tech startups and witnessing 42 new unicorns and 11 IPOs in 2021. Over 2,250 tech startups were founded in 2021 and a total highest-ever funding of $24 billion was raised in 2021.  

The industry also witnessed maturity in the software products segment with the presence of over 2,000 software product companies and 1,000 SaaS companies in India. Indian SaaS-based companies also secured $4.5 billion funding in 2021.

Innovation and partnerships across the ecosystem will accelerate digital capabilities leading to higher investment in research and development (R&D), building products and platforms. While cloud, cybersecurity, data and artificial intelligence (AI) will continue to be top tech priorities for the industry, centres of excellence will be set up in emerging areas like quantum technologies.