Indian IT exports to reach $210Bn by FY25: HSBC Global Research
NEW DELHI, INDIA — India’s IT exports are projected to hit US$210 billion in the 2024-25 financial year, accounting for 18% of the global IT outsourcing market, according to an HSBC Global Research report.
This marks a significant increase from 13% in 2015-2016, showcasing a decade of steady growth. The report highlights India’s expanding role in the global IT landscape, driven by its ability to deliver cost-effective and high-quality services.
U.S. recovery fuels growth amid European weakness
The HSBC report predicts that industry growth will accelerate to 6%-7% in FY26, compared to the slower 3%-4% seen over the past two years. This recovery is expected to be led by improving demand in the United States, particularly in the banking and retail sectors.
However, European demand is weakening, offsetting some of the gains from the U.S. market. Analysts also cite uncertainties surrounding generative artificial intelligence (GenAI) adoption as a potential drag on growth.
FY24 sees sluggish growth in IT exports
According to Nasscom, India’s IT exports grew by just 3.3% in constant currency terms to $199 billion in FY24, a sharp decline from the 11.4% growth recorded the previous year.
This slowdown represents one of the weakest growth rates in the industry’s history, attributed to global economic uncertainties and tighter discretionary spending.
Emerging challenges and opportunities for Indian IT firms
Industry experts point to challenges within key verticals like banking, financial services, and insurance (BFSI), particularly in regions like the Americas and Europe, the Middle East and Africa (EMEA).
Mrinal Rai, assistant director and principal analyst in global tech research and advisory firm ISG, noted that while contracts remain strong, deal ramp-ups have been slower due to tight discretionary budgets.
On the other hand, Phil Fersht, CEO of HfS Research, emphasized the need for Indian IT firms to diversify into high-growth areas such as AI and cybersecurity to stay competitive against global players like Accenture and IBM.
AI adoption: A boon and a threat
The rise of AI technologies presents both opportunities and risks for Indian IT firms. While GenAI projects are advancing beyond proof-of-concept stages, concerns over data privacy — especially in banking — are slowing adoption.
HSBC analysts warn that GenAI could automate up to 25% of low-complexity IT services work, potentially reducing overall spending by 4%-5% over the next few years.
Outlook: Adapting for sustained growth
Despite these challenges, Indian IT firms remain well-positioned for long-term success. By leveraging emerging technologies like AI and expanding their service portfolios beyond traditional domains, they can continue to strengthen their leadership in global IT outsourcing markets.
