As the IT service exports come out unscathed amidst a turbulent period for the world, industry players believe it’s time the service portfolio spread out.
iStockFor almost two decades, India’s IT service exports were concentrated in software development and BPOs. However, in the last decade, services around cloud computing, automation, and AI have rapidly grown in the country.
India’s exports, particularly merchandise exports, have gone through a turbulent period last year due to the slowdown in demand and geo-political conflict. However, the services sector not only continues to grow steadily amidst the global supply chain tensions, but is also expected to diversify in offerings, especially in the IT (Information Technology) segment.
Historically, the majority of India’s IT service importers include North America and Europe, but there has been a lot of interest and potential coming from Asia, Africa, and Latin America, says experts.
Rahul Ahluwalia, Co-Founder of Foundation for Economic Development, believes that the supply chain crisis is not likely to have much impact on services exports, unless it starts affecting digital connectivity.
He also says that it’s time we should aim at a broadening of India's services exports.
For almost two decades, India’s IT service exports were concentrated in software development and business process outsourcing (BPO). However, in the last decade, services around cloud computing, automation, and Artificial Intelligence (AI) have rapidly grown in the country as well as the demand by importers.
A report by PwC estimates that AI could contribute up to $15.7 trillion to the global economy in 2030. Another report by Bain & Company pointed out India produces 16% of the world’s AI talent pool. The country falls in the top three tech talent markets in the world.
“We should look into more professional services like accounting, legal etc. and also quasi-professional services like coaching, therapy, etc. One important disruptive force to keep in mind will be AI, which will soon be able to perform many of these services,” Ahluwalia says.
Bhaskar Ganguli, Director and co-Founder of Kolkata-based SEO firm Mass Software Solutions Pvt. Ltd says that the steady growth of services is driven by improved global demand or a focus on high-growth services and, with strategic investments, exports should keep rising.
Speaking on similar lines with Ahluwalia, Ganguli says that digital services like cloud computing and data analytics offer significant growth potential.
A report by International Data Corporation (IDC), showed that the overall public cloud services market in India is projected to reach $17.8 billion by 2027. This is an increase of 23.4% CAGR between 2022 and 2027.
“Specialisation in niche areas like healthcare, IT, fintech, and e-commerce services can also help Indian firms stand out. Moreover, investing in skilling the workforce for new technologies and promoting innovation will be prime differentiators for India's service exports to maintain a global position,” he says.
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