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Indian IT/Software Sector Statistics: 1980-2015 Time Series Data

28 April 2015 5 comments

The spreadsheet linked below provides time-series data for India’s IT industry, updating data from an earlier blog entry on Indian IT data to 2009. Software export figures run from 1980; overall IT outputs from 1991; and detailed breakdown from 1998 including BPO (business process outsourcing) data from 2000.  Data from 2009/10 uses a different source, so changes from 2008/09 to 2009/10 are not reliable.

Link to XLS version of Indian IT data via Google docs

Main headlines:

a) Indian Software Exports

a1) Indian software exports are huge – roughly US$75bn in 2014/15 (and c.US$100bn if BPO services are included) – and continuously registering double digit annual growth.

a2) But the overall pattern of growth is slowing: the ten-year annual growth average was c.40% in 2002; c.30% in 2008; c.20% in 2014.

a3) IT software/services’ share of total exports remains roughly static: it was just under 14% in 2003/04 and just under 15% in 2013/14[1].

a4) Market diversification for Indian software remains limited.  In the early 1990s, export destinations were: US (c.60-65%), UK (c.10%), other Europe (c.10%), Aus/NZ (c.5-10%), Asia (c.0-3%)[2].  Twenty years later in 2013-14, export destinations were: North America (63%), UK (13%), other Europe (11%), Aus/NZ (4%), Asia (6%)[3].

a5) Location of production has changed.  In the early 1990s, 75% of work took place on-site, 25% in India[4].  By 2013/14, it was said that 20% of work took place on-site, 80% in India[5].  This means that net foreign exchange earnings will have risen as a proportion of gross since offshore work requires much less foreign exchange outflow than on-site working.

a6) One source[6] claims that productivity (as measured by average revenue per employee) in the Indian software sector has risen from c.US$7,000 per head in the mid-1990s, to c.US$16,000 in the late 1990s, to US$38,000 in 2014.  But my own data[7] gives a completely different picture: that productivity in the 1990s was static at just over US$30,000 per head, and thus has risen very little during the 2000s: at best by 1-2 percentage points per year.

Indian Software Exports 1980-2015

b) Domestic IT Production

b1) Although the Indian domestic IT market is large and growing, production for exports is growing faster than production for the domestic market.  As a result, the share of exports in total IT output has risen from 19% in 1991/92 to 49% in 2000/01 to 67% in 2007/08 to 81% in 2014/15.

b2) IT production for the Indian domestic market and domestic IT consumption are very different.  For example, domestic computer hardware production in 2013/14 was roughly US$3bn.  But domestic IT consumption was US$12.4bn[8].  In part, this may be because the two figures are counting different things (e.g. consumption figure includes peripherals, network kit, storage, etc).  But it likely also points to a high – and said to be growing – share of imports in Indian domestic IT consumption.

Indian IT Export Share 92-15

c) IT Sector Overall

c1) The IT sector overall in India represents just over 5% of GDP in 2014/15.

Indian IT Overall 92-15

 

[1] Mani, S. (2014) Emergence of India as the world leader in computer and information services, Economic & Political Weekly, XLIX(49), 51-61

[2] Heeks, R. (1996) India’s Software Industry, Sage, New Delhi

[3] ESC (2014) Computer Software/Services and ITeS Exports, Electronics and Computer Software Export Promotion Council, New Delhi www.escindia.in/uploads/SOFT1415.pdf

[4] Heeks (ibid.)

[5] RBI (2015) Survey on Computer Software & Information Technology Enabled Services Exports: 2013-14, Reserve Bank of India, New Delhi https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=15452

[6] Malik, A. & Nilakant, V. (2015) Context and evolution of the Indian IT industry, in: Business Models and People Management in the Indian IT Industry, A. Malik & C. Rowley (eds), Routledge, Abingdon, UK, 15-34

[7] Heeks (ibid.)

[8] Chawla, M. (2014) Indian IT hardware markets stands at $12.43bn, The Economic Times, 25 Jun http://articles.economictimes.indiatimes.com/2014-06-25/news/50856134_1_anwar-shirpurwala-biswapriya-bhattacharjee-indian-it

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