This morning, after attending an excellently performed webinar by Franck Euvrard on the perspectives of collaboration between software sectors of India and France, I spent some time reading about the development of software industry in India and came across very exciting figures and information. The country has been displaying amazing growth of software development market: the figures I found are really impressive.

First, I ran across a Microsoft article of 2022, where the author stated that by 2027, India’s software industry “will nearly double in value to just over $12 billion… showing an average annual growth rate of 12.25 percent”.

The Indian software industry has been driven by digital transformation, cloud adoption, AI integration, and a surge in global demand for IT services. Here are a few more figures illustrating this growth:

1. Overall Growth in Revenue:

• 2020: The Indian IT industry, including software services, generated $194 billion in revenue.
• 2021: Revenue increased to $194.8 billion, showing resilience during the pandemic due to increased global reliance on technology.
• 2022: The IT industry grew by 15.5%, reaching $227 billion, as reported by Nasscom.
• 2023: Revenue further surged to $245 billion as digital transformation initiatives accelerated globally, driven by cloud computing, AI, and cybersecurity demands.

2. Growth in Software Exports:

• Software and IT services exports have been a major contributor to India’s growth. In 2019, exports reached $147 billion, and by 2023, they exceeded $180 billion.
• Indian companies are key outsourcing partners for countries like the U.S., U.K., and Europe, with around 60% of India’s IT services revenue coming from these markets.

3. Employment Growth:

• The Indian software and IT sector employed approximately 4.36 million professionals in 2019.
• By 2023, this figure grew to 5.4 million, driven by the industry’s expansion into new technology areas like AI, machine learning, and cloud services.

4. Sectoral Growth:

• Digital Services: In 2022, the digital services sector grew by 25%, contributing to over 40% of total revenue.
• Cloud Computing: Cloud services have been a major area of growth, with companies investing heavily in cloud infrastructure. In 2023, cloud-related revenue grew by nearly 30%.

5. Global Share and Investments:

• India’s share of the global outsourcing market continues to rise. By 2023, it held 56% of the global outsourcing market.
• Foreign Direct Investment (FDI) in India’s IT and software sector also surged. From 2018 to 2023, FDI into Indian IT saw a cumulative growth of over 60%.

These figures illustrate how India’s software industry has transformed into a global technology hub, attracting investments and expanding its global footprint. The sector continues to innovate and scale, especially in emerging tech like AI, blockchain, and cybersecurity, machine learning, and cloud services.

With the technology landscape changing as rapidly as it is right now, the focus — more than ever before —  is on cloud computing and coding. These skills are in high demand everywhere, and constant innovation is a critical survival skill for businesses to succeed in this digital economy.

According to an April 2019 report by Statista, 90 percent of Indians lacked key skills, with just 9.9 percent of IT engineering graduates being able to write correct code or code with few errors. This figure was marginally better than China (8.6 percent), but a far cry from USA’s 34.1 percent.

I could not find similar statistics for this year, but today, the situation has likely improved with massive efforts to address this gap through coding boot camps, internships, and specialized training programs. It is expected that the percentage of graduates who can code effectively remains relatively low compared to Europe and the USA, though showing signs of confident, gradual improvement.

Key Factors Contributing to The Improvement:

1. Curriculum gaps: Traditional academic curriculums in Indian engineering colleges often lack real-world coding practice and modern software development methodologies.
2. Training programs: Many students rely on external coding boot camps and internships to become job-ready.
3. Regional disparities: The quality of education varies greatly between Tier 1, 2, and 3 colleges, with the top institutions producing more industry-ready graduates.