India is the world's largest sourcing destination for the information technology (IT) industry. The Indian IT industry amounts to 55% of the global market, largely due to exports which are estimated to expand to USD 200 billion by 2020. The sector accounts for 38% of India’s services exports. India's IT industry includes Software Products, IT services, Engineering and R&D services, ITES/BPO (IT-enabled services/Business Process Outsourcing) and Hardware. The Indian IT/ITES industry is expected to grow at a CAGR of 9.5 percent and achieve a revenue target of USD 300 billion by 2020.
The IT industry has more than 15,000 firms of which more than 1000 are large firms. Some of these firms are Accenture (Ireland), Cognizant, Dell International, Intel and HP (USA), SAP (Germany) and Philips (Netherlands). The country is ranked as the 9th largest start-up hub in the world with over 3100 start-ups. The sector includes 640 offshore development centres (ODCs) across around 78 countries.
India is currently the second-largest telecommunication market and has the third highest number of internet users in the world. Wireless segment dominates the market with 97.36 percent of total telephone subscriptions. Government’s USD 1.1 billion smart city program will drive the market of M2M services in India with an increase in the number of mobile internet users to 314 million by the end of 2017. The deregulation of FDI norms has made this a fastest growing sector in the country.
The Information and Communication technology industry is driven by increasing adoption of technology and telecom by consumers and focused government initiatives, emerging verticals (retail, healthcare, utilities), expanding SMAC (social, mobility, analytics and cloud) market and government's Digital India Campaign.
The Indian government allows FDI upto 100 percent through automatic route in data processing, software development and computer consultancy services, software supply services, business and management consultancy services, market research services, technical testing and analysis services.