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The Expansion, Patterns, and Obstacles of India’s IT Sector in 2024

Despite facing significant global challenges, India demonstrated remarkable economic expansion during the fiscal year 2022-23, achieving a growth rate of 7.2 percent. This growth positioned India’s rate as the second-highest among G20 nations, nearly double the average for emerging market economies. Projections indicate that by 2027, the Indian economy is expected to surpass Japan and Germany, securing the world’s third-largest position, and by 2075, it is poised to claim the second spot. 

Forecasts suggest that by 2024-2025, India is set to have a $4 trillion economy, with aspirations to achieve developed status by 2047. This blog provides a glimpse into the current state of the IT sector, exploring the trends, challenges, and groundbreaking developments that define its landscape in the year 2024″

Progress of Indian IT sector

We know that with respect to various factors, the Indian Information Technology (IT) sector has emerged as a formidable global influence, significantly contributing to the nation’s economic prosperity and technological progress. A skilled workforce, a thriving entrepreneurial culture, and supportive government policies have propelled India’s technology sector to achieve international excellence, playing a crucial role in the country’s overall development.

Home to major international IT giants such as TCS, Infosys, Tech Mahindra, and Wipro, the Indian IT sector employs approximately 5.4 million people. It constitutes around 7.5 percent of India’s Gross Domestic Product (GDP) and generated $227 billion in revenue in 2022, with projections indicating a growth to $245 billion in revenue in 2023. This robust growth trajectory underscores the sector’s pivotal role in India’s economic landscape.

Prominent IT Positions :

Originally acclaimed for its prowess in IT consulting solutions and outsourcing, the IT industry has undergone a transformation by embracing cutting-edge technologies such as artificial intelligence (AI), cloud computing, blockchain, and the Internet of Things (IoT). According to India Today’s 2024 report, the following five IT roles are anticipated to be in high demand:

Data Scientists: With the capacity to drive decision-making and transcend industry boundaries, data science finds applications in diverse sectors such as finance, healthcare, and e-commerce. Indian cities like Bangalore, Delhi, Hyderabad, and Mumbai have emerged as vibrant hubs for professionals in this role. Consequently, the data science and analytics industry is poised to reach $3.03 billion, featuring over 72,000 job openings in 2024 and projecting to exceed 137,500 by 2025.

Artificial Intelligence (AI) and Machine Learning (ML): Over the next five years, AI and ML roles are set to dominate the Indian job market potentially creating up to 69 million new jobs. A report by the National Association of Software and Services Companies (NASSCOM), in collaboration with Salesforce and Draup, positions India at the forefront globally in AI skill adoption and talent concentration. India boasts an impressive AI Skills Penetration Factor of 09, surpassing all G20 and Organization for Economic Cooperation and Development (OECD) nations. This underscores that India’s technology professionals are three times more likely to possess or report AI skills compared to their counterparts in other countries.

Cloud Engineers: In 2024, Indian end-users are projected to invest around $13.6 billion in public cloud services, marking a substantial increase from $4.2 billion in 2022. The growing demand for cloud engineers is a direct result of this flourishing cloud technology market and the widespread integration of cloud computing across businesses of varying sizes.

Cybersecurity Analysts: The frequency and complexity of cyberattacks are on the rise, presenting challenges for organizations to effectively defend against them. In the second quarter of 2023, India experienced a 90 percent increase in cyberattacks, highlighting the crucial need for robust security measures, including powerful firewalls. Sectors such as banking, insurance, and healthcare are particularly vulnerable, with distributed denial-of-service (DDoS) and Bot attacks being predominant threats. As of May 2023, there were approximately 40,000 unfilled cybersecurity positions, emphasizing India’s growing demand for skilled cybersecurity experts. However, the demand-supply gap was at 30 percent, posing a significant skill challenge.

Full-stack Web Developers: By 2024, India is expected to host the world’s largest pool of developers, experiencing a growth rate of 39 percent that surpasses the number of web developers in the United States. Full-stack developers, among India’s highest-paying IT positions, will remain in high demand as long as the need for web application development persists.

Industries with the Highest IT Spending

Reports from the International Data Corporation (IDC) highlight significant digital transformation in the following industries, indicating an increased demand for IT services and solutions to navigate these changes.

Healthcare: The pandemic underscored the critical importance of a robust IT infrastructure in the healthcare sector. Digital innovations reshaping this industry include telemedicine, AI-assisted diagnostic tools, electronic health records, and personalized medicine.

Retail and E-commerce: The surge in online shopping has prompted retailers to invest in technologies such as AI, ML, augmented reality (AR)/virtual reality (VR), and the Internet of Things (IoT) to provide tailored, seamless, and captivating customer experiences.

Finance and Banking: Fintech solutions, spanning payments, insurance, personal finance, crowdfunding, and blockchain technology, are assuming paramount importance. Mobile banking, digital wallets, and cryptocurrency represent integral components of a digital future in the financial sector.

Logistics and Supply Chain: Companies are harnessing technologies such as AI, machine learning, IoT, and blockchain to elevate efficiency, transparency, and reliability in logistics and supply chain operations. These technologies play a crucial role in managing intricate supply chains, optimizing logistics, and enhancing forecasting accuracy.

Challenges in the IT industry

As the IT sector undergoes rapid expansion, organizations are confronted with an increasingly competitive environment for tech talent. Challenges anticipated in 2024 include:

  • Talent Competition: The technology sector in India is expanding rapidly, resulting in an unprecedented demand for proficient tech professionals. Consequently, a fiercely competitive job market has emerged, with numerous firms competing for the same talent pool. Companies encounter difficulties in attracting and retaining top tech professionals, as rivals often entice them away with more appealing salary packages, benefits, and working environments during the 90-day notice period between jobs.

  • Shortage of Skilled Talent due to New Technologies : A significant hurdle arises from the scarcity of skilled IT professionals in emerging technologies. While India is projected to have a talent surplus by 2030, including over one million highly-skilled tech professionals, questions persist about the skill sets and expertise these individuals bring. As organizations adopt new technologies, the demand for skilled talent in these areas will escalate, potentially resulting in skills gaps and posing challenges in meeting industry demands.

  • Decreased Hiring of Fresh Graduates : IT service organizations in India are considering a 30 year-on-year reduction in the recruitment of fresh graduates for the fiscal year 2024. This decision is driven by a sluggish deal pipeline, compounded by lingering concerns about a potential recession in the United States. As companies, traditionally extensive recruiters from campuses, scale back their hiring initiatives, it has resulted in limited job offers and intensified competition among students vying for these opportunities.

Conclusion: A Promising Future:

India’s IT industry is still positioned for long-term growth and innovation as it meets the challenges of 2024. Along with The industry is well-positioned to favorably influence India’s economic future with a deliberate focus on talent development, technical breakthroughs, and environmental sustainability.

 By leveraging technology, emphasizing soft skills, and prioritizing employee well-being, organizations can navigate the evolving dynamics of the remote work era and build a resilient workforce for the future. For assistance in recruiting the best and brightest talent in and around India, get in touch with us today. Don’t forget to explore more about our Staffing services in India, access our resources, and follow us on LinkedIn.


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