The Indian technology sector has achieved a 3.8% growth in fiscal year 2024, driven by demand for specialised skills and a rise in employment to 5.43 million professionals.
The Indian technology sector has continued its upward trajectory, demonstrating a year-on-year growth of 3.8% in the fiscal year 2024, reaching a valuation of $254 billion, according to the recently released ‘2025 Tech Trends Report’ by Grant Thornton Bharat. This expansion is accompanied by an increase in employment, with the sector now providing jobs to approximately 5.43 million professionals, marking a 1.1% rise in workforce numbers.
The report indicates that the surge in demand for specialised skills in generative AI, cloud computing, and cybersecurity has been a significant factor driving this growth. To address the ongoing talent shortages, particularly in metropolitan areas, technology companies are increasingly focusing their recruitment efforts in tier 2 and tier 3 cities across India. Raja Lahiri, Partner and Technology Industry Leader at Grant Thornton Bharat, commented on this trend, stating that firms need to effectively navigate both the new growth challenges and the opportunities presented by generative AI and other emerging technologies.
In terms of sector-specific growth, niche areas such as aerospace, defence, and automotive digital engineering have witnessed a remarkable increase of 7.4%, primarily fueled by advances in generative AI and Engineering Research and Development (ER&D) services. Moreover, India hosts approximately 1,700 global capability centres (GCCs) that have contributed to its reputation as a global innovation hub. This is further bolstered by significant investor interest, alongside a flourishing ecosystem of over 3,600 deeptech start-ups concentrating on fields such as artificial intelligence, space technology, and health technology.
The report also highlights that strategic deployment of AI is essential for enhancing operational efficiency and establishing robust governance frameworks, which are vital for delivering long-term value. Nevertheless, the sector has faced its share of hurdles, including a slowdown in revenue growth and an escalation in employee costs, a situation exacerbated by the high attrition rates experienced during the pandemic. Companies are encouraged to find a balance between cost control and innovative investments to remain competitive.
Speaking to Siliconindia, Lahiri stated, “India is expected to dominate the global technology services market, driven by its vast engineering talent pool and the high-quality impact of business and digital transformation for global clients.” The report ultimately calls for Indian tech companies to nurture a culture that emphasises excellence in innovation, quality, and customer experience, which positions them to lead in the global technology landscape by 2025.
Despite ongoing challenges, the industry appears well-positioned to benefit from the adoption of Software as a Service (SaaS), digital transformation initiatives, and advancements in generative AI, suggesting a potential for moderate recovery in the upcoming year.
Source: Noah Wire Services
- https://insights.encora.com/insights/indias-tech-industry-growth-opportunities-and-future-trends – This article supports the growth of the Indian tech industry, including its projected revenue and the impact of digital transformation, government initiatives, and a skilled workforce.
- https://www.india-briefing.com/news/indias-technology-spending-to-reach-us54-5-billion-in-2024-33328.html/ – This report corroborates the significant increase in India’s technology spending, driven by digitization efforts and growth in software and IT services.
- https://www2.deloitte.com/in/en/pages/technology/articles/tech-trends-2024.html – Deloitte’s Tech Trends 2024 report supports the revenue growth of the Indian technology industry, including hardware, and the expansion of Global Capability Centers (GCCs).
- https://insights.encora.com/insights/indias-tech-industry-growth-opportunities-and-future-trends – This article highlights the importance of specialized skills in areas like generative AI, cloud computing, and cybersecurity, and the recruitment efforts in tier 2 and tier 3 cities.
- https://www.india-briefing.com/news/indias-technology-spending-to-reach-us54-5-billion-in-2024-33328.html/ – The report mentions the growth in niche areas such as aerospace, defence, and automotive digital engineering, fueled by advances in generative AI and ER&D services.
- https://www2.deloitte.com/in/en/pages/technology/articles/tech-trends-2024.html – Deloitte’s report discusses the role of GCCs in India’s reputation as a global innovation hub and the ecosystem of deeptech start-ups.
- https://insights.encora.com/insights/indias-tech-industry-growth-opportunities-and-future-trends – The article emphasizes the strategic deployment of AI for enhancing operational efficiency and establishing robust governance frameworks.
- https://www.india-briefing.com/news/indias-technology-spending-to-reach-us54-5-billion-in-2024-33328.html/ – The report touches on the challenges faced by the sector, including revenue growth slowdown and high employee costs, exacerbated by the pandemic.
- https://www2.deloitte.com/in/en/pages/technology/articles/tech-trends-2024.html – Deloitte’s report suggests that companies need to balance cost control with innovative investments to remain competitive, aligning with the need for a culture of innovation and quality.
- https://insights.encora.com/insights/indias-tech-industry-growth-opportunities-and-future-trends – The article predicts the potential for moderate recovery in the upcoming year due to the adoption of SaaS, digital transformation initiatives, and advancements in generative AI.
