IT/ITeS policy revamp on cards to push sector’s GDP share, exports | Business News

The Centre has initiated discussions with the private sector to revamp its decade-old national information technology policy with an aim to increase share of the country’s burgeoning information technology (IT) sector in India’s gross domestic product, The Indian Express has learnt. The sector, which comprises companies like Infosys, TCS and Wipro along with a range of new-age startups, has been a big part of India’s services-led tech exports in the last two decades.

A meeting between the IT Ministry and industry bodies to seek inputs on the contours of the imminent policy, tentatively being called the National IT Policy, 2024, was held earlier this month, three sources told this paper. A senior government official said that the IT Ministry has asked the industry to share their perspective on issues like talent access, reduction in increasing costs, cybersecurity, and how India’s digital public infrastructure such as Aadhaar, UPI and ONDC can be used to help the tech sector.

The ministry, which is leading the dialogue with the industry, has communicated to them that it aims to expand exports of the software industry from the current $200 billion to $400 billion by 2030, and increase revenues of the software industry from $254 billion at present to $500 billion by 2030 while generating direct and indirect employment for 10 million people. The current IT policy was finalised in 2012, and the government believes there is a need for the revamp given that the country’s tech ecosystem has matured in the last decade.

It is worth noting, however, that as per the government’s own IT policy of 2012, it had hoped that the revenue software industry would be worth $300 billion by 2020. According to the government’s current projections ($254 billion), that does not seem to have happened. The IT Ministry did not respond to a request for comment.

The IT sector had a relative share to India’s GDP of around 7 per cent in 2023-24 (FY24), according to information on the IT Ministry’s website. The sector has also created large employment opportunities and is estimated to employ 5.43 million professionals, an addition of 60,000 people over FY23. Women employees account for 36 per cent share in the total industry employee base. Amid global geopolitical tensions leading to a more cautious approach for investments and delayed decision making, industry body Nasscom estimated that India’s technology industry revenue (including hardware) was likely to reach $254 billion in FY24, an addition of over $9 billion over last year. Exports are poised to touch the $200 billion mark, and the domestic technology sector is expected to cross $54 billion.

Festive offer

“Despite the tough market conditions, the industry continues to be a net hirer, adding 60K employees, taking the total employee base to 5.43 million (1.1 per cent y-o-y growth). Europe, APAC, manufacturing, retail and healthcare emerge as the key growth markets for the industry,” Nasscom said in its 2024 overview for the tech sector. A big focus of the revamped policy is also expected to be funding original research and development in India in emerging technologies like artificial intelligence and quantum computing. The policy is likely to enable multinational companies to set up more global capability centres in India, which in the last two decades has become the biggest home to such off-shore tech operations. It is understood that the government intends to double the number of GCCs in India from the current 1,600 to 3,200 by 2030. “We will also explore how we can financially support at least 10,000 tech start-ups overall and 2,000 from smaller cities in particular as part of the policy as well,” a government official said. The government is also looking to create a talent pool of people who are conversant with nuances of emerging technology that can support the growth of the software product industry.

© The Indian Express Pvt Ltd

Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers’ rights, privacy, India’s prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. … Read More

First uploaded on: 30-05-2024 at 05:20 IST


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