Industry

The Information Technology-Business Process Management (IT-BPM) sector is a major segment of India’s services. It accounts for 8% of India’s GDP, employing more than 1.2 million people and constitutes sub-sectors such as Information Technology Services, Business Process Management (BPM), Hardware and Software Products and Engineering services.
State of IT-BPM industry in India:

• Within the IT-BPM sector, IT services constitute more than 51% share, followed by Software and Engineering services and BPM industry respectively.
• India’s BPM industry, with over 17,000 firms, currently controls more than a 37 per cent share in global sourcing and is witnessing a revenue growth of 1.7 times.
• The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 85.51 billion between April 2000-March 2022.
• India’s IT-BPM sector is expected to expand to US$350 billion by 2025 and BPM is expected to account for US$50-55 billion out of the total revenue.

Factors that are at play in determining the location of IT hubs in different Indian cities are the following:

• Development of IT parks: State governments have given a boost to the IT sector by developing major IT parks. For example, many IT parks in Bengaluru, Chennai, Mumbai and Hyderabad have helped them become the country’s major IT hubs.
• Local talent: Abundance of local talent in the city has enabled Bengaluru to become one of the most preferred destinations for IT investment.
• Government policies: Government measures to ease processes and attract tech firms to invest have given an impetus to the sector. For example, government-backed incubators, strong academic and research lab presence, initiatives like Start-Up Telangana portal, etc. have attracted many international conglomerates such as Microsoft, Google, IBM, Yahoo, Dell and Facebook to set up their Indian headquarters in Hyderabad.
• Strategic location: Cyber City, Gurugram is one of the country’s fastest-growing districts and has emerged as a preferred destination for IT companies due to its strategic location and proximity to the capital.
  • Similarly, the strategic location of Kochi and its proximity to the administrative department of the Ernakulam district has made it one of the leading IT centres of India.
• Development of infrastructure: Adequate infrastructural support coupled with hundreds of colleges, polytechnics and ITls in Chandigarh city has made the city one of the largest technological hubs of Northern India.
  • Similarly, Thiruvananthapuram has world-class IT infrastructure facilities, which makes it a much sought-after IT destination in Kerala. Also, the state offers great opportunities for the IT industry due to factors such as geographical accessibility, an extensive telecom network that reaches most towns and villages, high literacy and export-based trade and commerce.

Apart from the above factors, other elements such as ‘work from anywhere’, relocation of talent to their hometowns, are critical in the evolution of Tier-II and III cities as supplementary ecosystems to the already established IT-BPM locations. Ahmedabad, Surat, Vadodara and Nagpur draw strength from mature IT-BPM destinations like Mumbai, Navi-Mumbai, Thane and Pune. Also, most Southern cities benefit from the presence of IT industries in Bengaluru, Hyderabad and Chennai.