Digital deals, R&D spends aid IT sector clock 15.5% growth in FY22: Economic Survey 22-23

This compares with 2.1% growth for the fiscal year 2020-21.

Covid-19 has accelerated the pace of digital transformation across most of India’s end-user industries, with companies witnessing a rise in investment, more complex technology convergence use-cases, and the prioritisation of enterprise-scale data and cloud strategy, said Economic Survey report for the year 2022-23.

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“Global capability centres in India are increasingly performing complex R&D functions and are leveraging futuristic technologies and developing digitally innovative products as well building either the largest or the second-largest ER&D hubs in India,” the survey noted.

Also, the proportion of digital revenue as a percentage of total revenue has increased from around 26-28% in FY20 to 30-32% in FY22.

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The survey also said all sub-sectors of the sector showed double-digit revenue growth for the year. Within the IT-BPM sector, IT services constitute the majority share with over 51% and exports, including hardware witnessed a growth of 17.2% in FY22 compared to 1.9% growth in FY21, owing to the increased reliance of businesses on technology amid the pandemic and the roll-out of cost-saving type of deals.Also read | Economic Survey 2023: what’s in it for ecommerce and cryptocurrency sectors

The US occupied the first position in terms of export destination occupying a 62% share while the UK had a 17% share.

India maintained its dominance in the world services trade in FY22 despite pandemic-induced global restrictions and weak tourism revenues, the survey said. India’s services exports stood at $254.5 billion in FY22 recording a growth of 23.5% on year. Software and business services together constituted more than 60% of the country’s total services exports.

The government has also noted that patent filing has increased drastically, with over 138,000 patents filed between 2015- 21– a 46% increase during the period. Also, over 85,000 filed in emerging technologies, indicating India’s emergence as a knowledge-based economy.