India Tech's Next Innings: Signals, Shifts and Considerations (Boston Consulting Group)

Summary

• India is a $4.2 T economy and India Tech Inc. generates roughly $300 B in annual revenues, contributes about 7% to GDP and directly employs approximately 5.8 M people.p.4
• The global technology market exceeds $8.4 T across nine segments, with IT Consulting and Services at approximately $1.5 T, nearly 17% of global tech revenues.p.4
• Indian-headquartered IT services firms make up 15-17% of the global IT services market, which accounts for almost 83-85% of the India Tech market.p.5
• India Tech Inc. generates $300 B+ in revenue, 7.3% of India's GDP, growing approx. 5% YoY, with 30,000+ tech firms and startups.p.15
• IT and ITeS exports exceed $200 B+ annually, about 45% of India's services exports, underpinning a $150 B services trade surplus.p.15
• India's R&D spend remains c. 0.7% of GDP, materially below the 3-4% seen in leading innovation economies.p.17
• Global Tech is a c. $8.4 T market comprising 280,000+ companies, of which 8,600+ are listed.p.22

Key insights

1. Direct employment in India Tech is around 5.8 M, with 10-12 M indirect jobs created via support industries.p.15
2. Hyperscalers++ (13.5x), semiconductors (14x), AI-first companies (17.5x) and deep tech (20x) command the highest enterprise value multiples among the nine global tech segments.p.22
3. Global software is a $1,022 B segment growing at a 15% CAGR, and AI-first companies a $30 B segment growing at 42%.p.22
4. India Tech is a $300 B+ market with 30,000+ firms and startups and c. 400 listed tech companies.p.24
5. IT Consulting and other services account for $247 B of India Tech's market, growing at a 5% CAGR.p.24
6. India Tech derives c. 84% of its size and value from IT services, which grow at 4-5% CAGR.p.25
7. India has a c. 17% share of global IT services but minimal presence in AI-first, hyperscaler, deep tech and semiconductor segments.p.26
8. Sentiment analysis covered 848 global tech companies' earnings calls.p.13