COMPUTER SOFTWARE/SERVICES AND ITeS EXPORTS
OVERVIEW
PRESENCE OF GLOBAL IT PLAYERS IN INDIA
SPECTRUM OF IT SERVICES/ ITES FROM INDIA
In recent times, Software development and information technology enabled services (ITeS) including business process outsourcing (BPO)/ knowledge process outsourcing services (KPO) industry in India has emerged as one of the most dynamic and vibrant sectors in India’s economy. With a small beginning in early 80s, it has now grown into a broad based comprehensive industry.
Today, India's competence in IT, more significantly in computer software and information technology enabled services recognized globally.
India today is the global leader in the outsourcing industry with half of the world's back office being located here.
Knowledge Process outsourcing (KPO) is one of the new dimensions of BPO that has given global outsourcing scenario a new meaning. Over a decade KPO has had a tremendous growth in India. Leading countries turn to India to get their job done when compared to other countries. The main reason for outsourcing to India is the highly rated knowledge pool and low costs as compared to other countries.
Indian IT firms and IT professionals have won world-wide recognition in terms of their technical competence, domain knowledge, experience and expertise for offering quality IT services, and their exposure to working on various platforms and systems.
There are a large number of multi-national IT enterprises operating in India in sectors such as: Integrated Chip Design, System software, communication software, R&D Centres, Technology Support sector, captive support sector, BPO Sector etc reaping the cost and quality advantages.
These multinational include Siemens/Philips, Intel, Texas Instruments etc. (Chip Design); Siemens, Motorola, Lucent Technologies, Sony, Nortel etc. (Communication Software); Google, Yahoo etc. (R&D Centres); Axa Business Services, Swiss Shared Services, Siemens Shared Services etc. (BPO Sector); Accenture, DELL, HSBC, GE Capital, Fidelity (Captive Support Sector), Hewlett Packard, IBM, CISCO, Oracle, Microsoft, SAP, NOKIA, Vodaphone etc.
The software industry is not only growing exponentially, it is moving up the value chain. It is evolving, from the initial staffing to software development - where it is currently the world's major supplier of engineers - to integration and IT business consulting.
● One of the largest pool of technically qualified high class IT manpower.
● Enormous skilled human resource compared to developed countries leading to lower
manpower cost nearly one tenth of those in developed nations, thus giving India a comparative advantage.
● Offers a wide range of services from support / data processing to sophisticated software
systems etc.
● Rich experience of working with large global companies and enjoy high credibility. ● Expertise on a wide variety of platforms.
● Accommodating nature of Indian IT workforce.
Today the world recognises India as a source of high quality IT manpower. Nearly 35 percent of world wide SEI CMM level 5 certified companies are Indian. The Capability Maturity Model (CMM) for Software describes the principles and practices underlying software process maturity and is intended to help software organizations improve the maturity of their software processes in terms of an evolutionary path from ad hoc, chaotic processes to mature, disciplined software processes.
Over 300 Indian computer software and services companies have already obtained ISO 9000 or CMM level 2 certification. It is because of this high quality of Indian IT sector that the majority of multinational companies in IT have either their software development or research center in India. One third of the e-commerce start-ups in the Silicon Valley continue to be lead by Indian. Over half of the Fortune 500 companies are outsourcing their software requirements to India.
High quality of IT services has put Indian companies in worlds Top 100 Outsourcing companies such as HCL Technologies, Mindtree, Datamatics, HGS, ITC Infotech, Persistent Systems, Mastek.
Software is a knowledge driven industry. It requires a team of highly skilled professionals for its success. Today, the Indian IT Services and ITES sector employs over 3 million knowledge professionals. The industry indirectly employees another 9 million people. Almost all major IT players in the world have set up subsidiaries or collaborations in India.
India, today have 16 Indian Institute of Technologies (IITs), 13 IIMs, 30 National Institute of Technology, 12 Indian Institute of Technology. In total there are 5672 Engineering Institutes in India in 27 States and Union Territories. Approximately, 1.5 million Engineering Graduates pass out every year in India.
Production of Computer Software and Services during the year 2013-14 is estimated to be Rs. 622223 crore (US$ 103 billion) registering a growth of 22 percent (9 percent in US$
STRENGTHS OF INDIAN IT INDUSTRY
QUALITY OF INDIAN IT EXPERTISE
MANPOWER EMPLOYED AND EDUCATIONAL INSTITUTIONS
terms) over the year 2012-13 when the total production of Computer software / Services was estimated to be Rs. 509700 crore (US$ 94.38 billion).
COMPUTER SOFTWARE AND SERVICES PRODUCTION 2009-10 TO 2013-14
64956 74890 87139 94389 103000 0 20000 40000 60000 80000 100000 120000 2009-10 2010-11 2011-12 2012-13 2013-14 US$ MLN 308150 341200 418265 509700 622223 0 100000 200000 300000 400000 500000 600000 700000 2009-10 2010-11 2011-12 2012-13 2013-14 Rs. Crore
SHARE IN GDP
DOMESTIC SOFTWARE / SERVICES INDUSTRY.
EXPORT OF COMPUTER SOFTWARE / SERVICES INCLUDING ITeS / BPO.
India’s Gross Domestic Production (GDP) at current prices is estimated to be Rs. 11355073 crore (US$ 1879.66 billion). Computer Software / Services production estimated at US$ 103 billion accounts for a share of 5.48 percent in India’s GDP at current prices during the year 2013-14.During the year 2013-14 India’s domestic computer software / services market is estimated to be Rs. 114779 crore (US$ 19 billion) registering a growth of 21.86 percent (8.32 percent in US$ terms) over the year 2012-13 when the domestic software / services industry was estimated at Rs. 104700 crore (US$ 19.39 billion).
7 8 .0 6 7 9 .4 6 8 1 .5 5 7 6 .9 3 7 8 .5 2 7 4 7 5 7 6 7 7 7 8 7 9 8 0 8 1 8 2 2 0 0 9 -1 0 2 0 1 0 -1 1 2 0 1 1 -1 2 2 0 1 2 -1 3 2 0 1 3 -1 4
GROWTH IN EXPORTS OF COMPUTER SOFTWARE & ITeS 2008-09 TO 2013-14
Out of the total production of computer software / services 81.55 percent is exported and only 18.45 percent is consumed by the domestic market.
Export of Computer Software / Services (including ITES / BPO) registered a growth of 25.31 percent (12.01 percent in US$ terms) during the year 2013-14 over the year 2012-13. In value terms, export of this sector during 2013-14 is estimated to be Rs. 507500 crore (US$ 84009 million) up from Rs. 405000 crore (US$ 75000 million) estimated in the year 2012-13.
GROWTH IN EXPORTS OF COMPUTER SOFTWARE & ITeS 2008-09 TO 2013-14 227834 241950 262500 326500 405000 507500 0 100000 200000 300000 400000 500000 600000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Rs. Crore 49540 51001 57616 68021 75000 84001 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 US$ MLN
Annual Growth rate during 2008-09 to 2013-14 : Rupee term = 17.37 % US$ term = 11.13 %
EXPORT OF IT SOFTWARE / SERVICES
Export of IT Software / Services estimated at Rs. 384500 crore (US$ 63.46 billion) during 2013-14 registered a growth of 25.24 percent (11.95 percent in US$ terms) over the year 2012-13 when the export of IT software and services was estimated at Rs. 307000 crore (US$ 56.85 billion).
EXPORT OF COMPUTER SOFTWARE / SERVICES & IT-ENABLED SERVICES EXPORT 2013-14
SEGMENT Export Export Growth in 2013-14
2013-14 2012-13 Over 2012-13
(%age)
US$ MLN. RS. CR. US$ MLN. RS. CR. US$ MLN. RS. CR.
Computer Software 63648 384500 56852 307000 11.95 25.24 & Services (IT)
ITES 20361 123000 18148 98000 12.19 25.51
TOTAL 84009 507500 75000 405000 12.01 25.31
164828 173550 187000 240700 307000 384500 0 50000 100000 150000 200000 250000 300000 350000 400000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Rs. Crore
GROWTH IN EXPORTS OF COMPUTER SOFTWARE / SERVICES 2008-09 TO 2013-14 35840 36583 41045 50146 56852 63648 0 10000 20000 30000 40000 50000 60000 70000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 US$ MLN
ITES / BPO EXPORT
India today with its English speaking skilled manpower, high quality of services, very high productivity and a conducive policy environment with strong government support is the most preferred destination for ITES. India is a popular choice for customers seeking outsourced services because it is able to offer a 24X7 service and reduction in turnaround times by leveraging time zone differences. While customers are initially attracted by low costs, they stay on and expand because of the quality and productivity that India offers. India will remain a popular offshore Country. Outsourcing to India is turning out to be a blessing for the top companies. India’ s edge in quality and cost benefit is what is drawing organizations towards her. The level of excellence India has attained in this field has not come overnight. Government policies, infrastructure, large number of people who can speak fluent English, who can adapt to western accents, have all played a pivotal role in India’s success.
During the year 2013-14, export of ITES/BPO registered a growth of 25.51 percent (12.19 percent in US$ terms) over the year 2012-13. In value terms, export of ITES/BPO is estimated to be Rs. 123000 crore (US$ 20.36 billion) up from Rs. 98000 crore (US$ 18.14 billion) estimated in the year 2012-13.
GROWTH IN EXPORTS OF ITeS 2008-2009 TO 2013-14
INDIA’S SHARE IN WORLD SOFTWARE MARKET
NUMBER OF COUNTRIES OF EXPORT
World total Software market during the year 2013-14 is estimated to be US$ 407 billion. India’s share in the world market during the year 2013-14 is estimated to be 15.64 percent.
The preference of India as a preferred IT destination for software outsourcing and ITES / BPO is revealed from the total number of countries to which India is exporting its software and services. On an average India has been exporting Computer Software / Services to over 151 countries in the past five years. During the year 2013-14 India Exported Computer Software / Services to 150 countries of the world.
146 165 154 145 142 151 150 100 110 120 130 140 150 160 170 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
GROWTH IN NUMBER OF COUNTRIES FOR INDIA’S COMPUTER SOFTWARE/ SERVICES EXPORT 2007-08 TO 2013-14
MAJOR COUNTRIES OF EXPORT
MAJOR COUNTRIES FOR COMPUTER SOFTWARE EXPORTS DURING 2013-14
Value : Rs. Cr. (US$ Mln.)
COUNTRY NAME COMPUTER %AGE OF
SOFTWARE VALUE SECTORAL TOTAL
UNITED STATES OF AMERICA 292270.00 57.59
(48381) UNITED KINGDOM 86500.00 17.04 (14319) SINGAPORE 21823.00 4.30 (3612) AUSTRIA 12372.00 2.44 (2048) AUSTRALIA 10775.00 2.12 (1784) NETHERLANDS 8541.00 1.68 (1414) GERMAN REP. 8153.00 1.61 (1350) CANADA 7616.00 1.50 (1261)
UNITED ARAB EMIRATES 5000.00 0.99
(828) JAPAN 3800.00 0.75 (629) OTHERS 50650.00 9.98 (8384) TOTAL 507500.00 100.00 (84009)
MAJOR DESTINATIONS FOR SOFTWARE AND SERVICES EXPORTS
DURING 2013-14
MAJOR DESTINATION OF EXPORTS FOR CMPUTER SOFTWARE / SERVICES DURING 2013-14
26.90% 59.15% 1.26% 1.18% 0.91% 0.80% 2.15% 2.46% 0.20% 4.99% NORTH AMERICA EUROPE (EU COUNT.) SGP, HKG. & S.A. MIDDLE EAST AUSTRALIA & OCEANIC JAPAN, KOREA & F.E. AFRICAN COUNTRIES EUROPE (NON EU COUNT.) LATIN AMERICA
RUSSIA & C.I.S. COUNTRIES
REGION WISE EXPORT OF COMPUTER SOFTWARE / SERVICES EXPORTS 2012-13 VS 2013-14
Value : Rs. Cr. (US$ Mln.)
2013-14 2012-13 Variation (%) Destination Value %age of Value %age of In value In %age
Sectoral Sectoral terms Share
Total Total terms
NORTH AMERICA 300200 59.15 239000 59.01 25.61 0.24
(49694) (44259) (12.28)
EUROPE (EU COUNTRIES) 136525 26.90 109000 26.91 25.25 -0.04
(22600) (20185) (11.96)
SINGAPORE, HONG KONG 25300 4.99 21075 5.20 20.05 -4.20 & OTHER SOUTH ASIAN (4188) (3903) (7.31)
COUNTRIES
MIDDLE EAST COUNTRIES 12500 2.46 10000 2.47 25.00 -0.25
(2069) (1852) (11.74)
AUSTRALIA & OTHER 10900 2.15 8500 2.10 28.24 2.34
OCEANIC COUNTRIES (1804) (1574) (14.63)
JAPAN KOREA & OTHER 6000 1.18 4900 1.21 22.45 -2.28
FAR EAST COUNTRIES (993) (907) (9.46)
AFRICAN COUNTRIES 6400 1.26 5000 1.23 28.00 2.15
(1059) (926) (14.42)
EUROPE (NON EU COUNTRIES) 4600 0.91 3525 0.87 30.50 4.14
(761) (653) (16.65)
LATIN AMERICA 4060 0.80 3050 0.75 33.11 6.23
(672) (565) (18.99)
RUSSIA & C.I.S. COUNTRIES 1015 0.20 950 0.23 6.84 -14.74
(168) (176) -(4.49)
TOTAL 507500 100.00 405000 100.00 25.31
(84009) (75000) (12.01)
