How the Indian IT Industry Enabled Business Resilience Amid the Pandemic

The Indian IT industry helped global companies run critical operations and transformational projects in the face of unprecedented disruption.

June 7, 2021

The IT industry accounted for 8% of India’s GDP in 2020, despite the pandemic.

The IT industry played a pivotal role in ensuring a smooth transition to ‘work from home’ mode and ensuring business continuity.

The Indian IT industry is likely to maintain relevance amidst growing global demand for digital and cloud services.

The pandemic drove home the relevance of IT to ensure business continuity in these trying circumstances.

Over the last few decades, the Indian IT industry has emerged as one of the key drivers of India’s economic growth. As one of the leading sourcing destinations across the world for IT services, India is reported to have about 55% market share of the US$200-250 bn global services outsourcing business in FY2019-20. India is now considered  a prominent destination for companies across the world, catering to both on-shore and off-shore requirements globally. 

Last year, the world grappled with what emerged as the worst pandemic in a century, leading to the closure of several industries, production facilities, and manufacturing plants around the globe. Despite this, India’s IT industry stood tall, with  several global companies dependent on Indian IT firms to run critical operations and transformational projects in the face of unprecedented disruption. The IT industry was able to draw on its inherent strengths to deliver seamlessly to both global and Indian customers, without any drop in productivity or compromise on quality. 

The industry’s  success is there for all to see. The IT industry accounted for 8% of India’s GDP in 2020. IT exports grew to $150bn from $147bn last year. At the same time, domestic demand grew to $45 bn, up from $43bn last year. The IT & BPM industry’s revenue was US$194 bn in FY21, an increase of 2.3% YoY.

Responding to the Covid-19 Disruption

Even as Governments and medical experts across the globe emphasized that the best possible way to rein in the pandemic was to stay home, business continuity plans and disaster recovery strategies were severely tested. Almost every organization across industries bore the brunt of the virus. Internet connectivity and digital technology were at the forefront of ensuring economic and societal resilience. 

This led to a spurt in demand for digital transformation with an emphasis on human-digital interfaces, artificial intelligence (AI), open API ecosystems, cloud services and infrastructure, digital trust and blockchain, data-as-a-service and the internet of things (IoT). In this process, the Indian IT industry played a pivotal role in ensuring a smooth transition to ‘work from home’ mode. Major IT services and software companies from India secured new client strategic partnerships with leading global companies. 

The health sector too relied heavily on technology solutions as doctors, nurses and support staff worked tirelessly to fight the virus on the ground. Yet, they too depended on several technology solutions and apps to offer remote medical support to home-quarantined patients, chatbots to keep track of availability of hospital beds, medicines, ventilators, oxygen concentrators, etc. Big Data solutions to manage and store covid related information efficiently helped ease the situation to some extent. 

The banking and finance industry also relied heavily on IT solutions with the adoption of several advanced technologies such as AI bots for customer support, cloud solutions, and workflow automation to serve customers. 

Global in-House Centers (GICs) in India too played a key role in ensuring business resilience for several global companies. Over the last 15 years,  GICs have emerged as centres of strategic importance for their parent firms, but they rose to even greater significance during the pandemic. 

Future Growth Momentum

The pandemic drove home the relevance of IT as a key tool to ensure business continuity in these trying circumstances. As businesses across the globe embrace IT and digital technologies to further streamline their operations, build resilience, and remain competitive and relevant, this opens up a sea of new opportunities for the Indian IT industry. 

Fitch Ratings, a leading provider of credit ratings, commentary and research, has predicted that Indian IT services companies are set to achieve stronger revenue growth in the financial FY22, aided by a robust digital-transformation order pipeline. According to Fitch Ratings, top-tier Indian IT services companies such as Tata Consultancy Services, Infosys, HCL Technologies, and Wipro, are set to achieve double-digit revenue growth in FY22. 

The Indian IT industry, which is built on strong fundamentals is likely to maintain this resilience amidst growing demand for digital operations and cloud services, expected to reach US$ 350 bn by 2025. The future looks bright for Indian IT.