FDI in IT Sector in India

India has emerged as the world’s largest BPM destination with the IT-BPM sector having a staggering share of 45% in the total Indian services export. The sector is the largest employer within the private sector, employing 3.9 million people. It is, therefore, not surprising that the government has eased foreign investment policies in order to encourage more FDI in the IT sector in India.

Indian IT industry has more than 17,000 firms, of which over 1,000 are large firms with over 50 delivery locations in India. The country's cost competitiveness in providing IT services, which is approximately 3-4 times more cost-effective than the US, continues to be its unique selling proposition in the global sourcing market. India has become the digital capabilities hub of the world with around 75% of global digital talent present in the country.

Up to 100% FDI is allowed in Data processing, Software development and Computer consultancy services; Software supply services; Business and management consultancy services, Market research services, Technical testing and Analysis services, under automatic route.

100% FDI in the IT sector in India is permitted in B2B E-commerce.



  • 1

    Largest market share in global services sourcing industry

  • 2

    3rd largest tech start-up hub of the world

  • 3

    2nd highest number of internet subscribers in the world

India’s IT & BPM industry grew to USD $181 bn in 2018-19. Exports from the industry increased to USD $137 bn in FY19 while domestic revenues (including hardware) advanced to USD $44 bn

The domestic market is catered by hardware segment and IT services, which contributed approximately $15 bn and $26 bn in 2017-18, respectively

IT services accounting for 56.4% of total IT exports

Software products and engineering services occupying 21.3% share of the total IT exports

The National Optical Fibre Network (NOFN) aims to connect all 250,000 Gram Panchayats in the country with high-speed broadband. Indian IT industry has more than 16,000 firms, of which 1,000 plus are large firms with over 50 delivery locations in India

By 2025, the Indian Information Technology and Business Process Management (IT and BPM) sector’s revenue is estimated to reach USD $350 bn

  • Skill development and R&D

    $ 1.6 bn is spent annually on training workforce a
  • The National Optical Fibre Network (NOFN)

    68,889 Gram Panchayats connected by optical fibre
  • Digital India campaign

    A $ 20 bn Investment covering mobile connectivity
  • Start-up revolution

    IoT, machine learning, artificial intelligence and
  1. Apr 2019: Wipro Lighting has formed a strategic partnership with Netherlands based Mapiq to develop smart workplace solutions using IoT and 3D mapping.
  2. Apr 2019: Palo Alto based ThoughtSpot will begin its business operation in India and invest $25 mn in its engineering centre in Bengaluru.
  3. Dec 2018: Japan’s Sansan raises $26.43 mn to aid India growth.
  4. Nov 2018: Mapletree Investment buys Chennai IT Park for $333.1 mn.
  5. Nov 2018: India cloud sector to boast 1 million jobs by 2022.
  6. Nov 2018: Lulu Group will invest Rs.2,400 crore to construct 50 lakh sq ft of IT space in Kerala.
  7. Mar 2018: Tata Communications gets ready for public utilities play, will invest $94.9 mn.

  • 6X Growth in FDI in information technology sector in India during 2014-17 viz-a-viz 2011-14
  • $37.2 bn FDI inflow (in USD) in computer software & hardware from April 2000 – March 2019
  • 1.8% Share in total FDI inflows

Data of Map

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