Overview

The global sourcing market in India continues to grow at a higher pace compared to the IT-BPM industry. India is the leading sourcing destination across the world, accounting for approximately 55% market share of the US$ 200-250 billion global services sourcing business in 2019-20. The IT industry accounted for 8% of India’s GDP in 2020. According to STPI (Software Technology Park of India), software exports by the IT companies connected to it, stood at Rs. 1.20 lakh crore (US$ 16.29 billion) in the first quarter of FY22.

Market Size

The ITES-BPO market has been growing exponentially over the past 20 years. The industry is expected to grow at an 8 per cent CAGR and reach US$225-250 billion by 2025. This growth is being propelled by the increasing demand for digital services, which is being driven by the growth of new technology-focused businesses and the explosion in data volumes. The packaged software segment is also estimated to grow rapidly during this time, contributing to additional volumes for BPO in India. India’s IT proficiency will fuel this growth, and it’s anticipated that the country will be a primary provider of software, including fintech, SaaS, and network security in the future.

Road Ahead

The ITES-BPO industry in India is expected to generate significant employment opportunities in the near future. The industry currently employs nearly 4 million people and is likely to create almost 6 million jobs by 2025. This growth will be driven by the increasing demand for IT and digital services, which will require new skillsets and manpower. The biggest employment generators are likely to be high-level outsourced services such as application development and maintenance, software testing, and the integration of technologies such as Artificial Intelligence (AI).