Indian Information Technology and Software Sector: A Comprehensive Industry Analysis Report | Scrolls
- Editor
- Aug 10
- 2 min read
by KarNivesh | 10 August, 2025
Overview of the Indian IT and Software Sector The Indian Information Technology (IT) and Software sector has transformed into a global technology powerhouse, moving from being a cost-efficient outsourcing hub to a strategic digital transformation partner for enterprises worldwide. It now contributes significantly to India’s GDP and is poised to reach new growth peaks by 2030.
Industry Structure and Market Size: The sector includes IT services, Business Process Management (BPM), software products, engineering R&D, and emerging digital technologies such as AI, cloud, and cybersecurity. With over 50,000 startups, 1,500+ Global Capability Centers (GCCs), and 5.4 million direct employees, it forms a robust innovation ecosystem concentrated in hubs like Bengaluru, Hyderabad, Chennai, and Pune.
In FY24, the IT-BPM industry generated ₹21.46 trillion (USD 253.9 billion) in revenue, with a 9% annual growth rate. The domestic technology market earned ₹4.57 trillion, growing at 5.4%. The IT services market was valued at ₹3.33 trillion, and the software market at ₹1.76 trillion in 2024. By 2030, IT services are projected to reach ₹6.27 trillion, and software to ₹5.14 trillion.
Key Players and Leadership: Market leaders include Tata Consultancy Services (₹2.43 trillion revenue), Infosys (₹1.55 trillion), HCL Technologies, Wipro, Tech Mahindra, and LTIMindtree. By market capitalization, TCS leads at ₹15.44 trillion, followed by Infosys and HCL, reflecting strong investor confidence. Mid-tier firms and global tech giants like Microsoft and Google also add to the competitive landscape.
Technology Trends: Digital transformation (75% adoption), cloud computing (62%), and cybersecurity (38%) are reshaping service delivery. India holds 16% of global AI talent, with the AI market expected to reach ₹2.44 trillion by 2025, aided by the government’s ₹87,677 crore IndiaAI Mission. Cloud services are projected to hit ₹2.16 trillion by 2028, and cybersecurity demand is surging amid rising data protection needs.
Strengths, Weaknesses, Opportunities, Threats (SWOT):
Strengths include a vast skilled workforce, cost competitiveness, and strong government support via initiatives like Digital India and PLI schemes.
Weaknesses involve heavy reliance on US/EU markets, low domestic value addition, rising wage costs, and talent shortages in emerging tech.
Opportunities lie in AI, cloud, IoT, and diversification into Japan, APAC, and Middle East markets.
Threats include visa restrictions, global competition, automation reducing routine IT work, cybersecurity risks, and geopolitical tensions.
Government Policies and Investments
Key initiatives include:
Digital India–Building digital infrastructure, enabling 100% FDI, and establishing 67 Software Technology Parks.
PLI Schemes–Incentivizing electronics and IT hardware manufacturing to boost domestic production.
IndiaAI Mission–Fostering AI infrastructure, skills, and startups.
The sector is set for robust growth driven by AI, cloud, 5G, IoT, and cybersecurity. Domestic demand, geographic diversification, and a shift to platform-based, outcome-driven models will shape the next phase. With projected revenues of ₹29.63 trillion (USD 350 billion) by FY26, the Indian IT and software sector is positioned for sustained global leadership through innovation and high-value digital services.