The Reserve Bank of India’s (RBI) 2023-24 survey on software exports highlights India’s impressive growth in IT and IT-enabled services (ITES). With software exports reaching $190.7 billion, driven by computer services and BPO, the survey underscores India’s global leadership in the sector, particularly in the US and Europe.
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Understanding RBI’s Latest Survey on Software Exports
The Reserve Bank of India (RBI) recently released the much-anticipated data from its annual survey on computer software and information technology enabled services (ITES) exports. This 2023-24 survey sheds light on India’s remarkable performance in software services exports, providing a detailed breakdown of export activities, key destinations, and much more.
Overview of the RBI Survey on Software Exports
The survey conducted by the RBI offers a comprehensive view of the software export sector, highlighting trends and growth across various categories like computer services and business process outsourcing (BPO). India continues to maintain its strong position as a global leader in IT services exports.
Key Insights from the Survey
The 2023-24 survey results are based on data collected from 2,266 companies, which together accounted for nearly 89% of India’s total software services exports. A notable 7,226 software companies were contacted for this survey.
Growth in Software Exports
One of the main highlights is that India’s software services exports increased by 2.8% during 2023-24, reaching a total of US$ 190.7 billion. This growth underscores the resilience of India’s IT sector, despite global economic uncertainties.
Computer Services and BPO: The Pillars of IT Exports
The report reveals that computer services contributed to more than two-thirds of India’s total software services exports, making it the dominant sector. Business Process Outsourcing (BPO) services also remained a strong player within ITES exports.
The USA and Europe: Leading Destinations for Indian IT Exports
The USA’s Dominant Role
With 54% of India’s total software services exports, the United States continued to be the primary destination for Indian IT services in 2023-24. The US market remains vital for India’s IT sector, offering a significant opportunity for growth and innovation.
Europe’s Growing Contribution
Europe accounted for 31% of total exports, with the United Kingdom playing a major role. This indicates that Europe, particularly the UK, is strengthening its partnership with Indian IT firms.
Currency Preferences in IT Exports
The survey data also gives us insight into the preferred currencies for invoicing software exports. The US dollar was the predominant currency, used in 72% of all transactions, followed by the Euro, Indian Rupee, and British Pound.
Information in Table format
| Category | Key Insights | Real-Life Example |
|---|---|---|
| Survey Overview | Survey conducted with 7,226 software companies; data from 2,266 companies represents 89% of India’s total exports. | Large IT firms like Infosys, TCS, and Wipro contribute significantly to export data. |
| Total Software Exports | India’s software services exports grew by 2.8% in 2023-24, reaching US$ 190.7 billion. | Infosys reported strong growth in software exports for FY24, reflecting the overall trend. |
| Major Sectors: Computer Services | Computer services accounted for over two-thirds of total exports. | TCS dominates global markets in cloud services, AI solutions, and software development for various industries. |
| Major Sectors: BPO Services | Business Process Outsourcing (BPO) services remain a key component of ITES exports. | WNS Global Services, a leader in BPO, provides customer support and back-office services to multinational corporations. |
| Top Destination: USA | The USA remains the largest market, accounting for 54% of total exports. | Indian IT companies like Cognizant have a significant presence in the US, providing software and consulting services. |
| Top Destination: Europe | Europe contributed 31% of total exports, with the UK as a major player. | Indian firms, including Tech Mahindra, offer digital transformation services to European banking and telecom sectors. |
| Currency Preferences | US Dollar: 72%, Euro: 9.3%, Indian Rupee: 7.1%, British Pound: 6.2%. | A majority of TCS’s contracts with international clients are invoiced in USD. |
| Service Type: Off-Site | Off-site services accounted for 90% of total software services exports. | HCL Technologies provides remote IT support and development services to clients around the world without on-site presence. |
| Private vs. Public Companies | Private limited companies contributed 57.8% to software exports, while public companies contributed 40%. | Mid-sized private firms like Mindtree saw substantial export growth compared to large public entities such as Infosys. |
| Delivery Mode: Cross-Border Supply | Cross-border supply was the dominant mode, accounting for 83.5% of software exports. | Wipro delivers IT services globally through offshore development centers, showcasing cross-border service delivery. |
| Software Exports Including Commercial Presence | Total exports, including those delivered by foreign affiliates, increased to US$ 205.2 billion. | Indian IT companies like TCS have offices abroad to serve local clients in countries like the US and UK. |
| Future Outlook | Indian software exports continue to grow, driven by demand from the US and Europe, and innovations in remote services. | Companies like Infosys and Wipro are investing in AI, cloud, and automation to stay competitive and drive future exports. |
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Breakdown by Currencies
- US Dollar: 72% share
- Euro: 9.3% share
- Indian Rupee: 7.1% share
- British Pound: 6.2% share
This reflects the importance of the US and European markets in driving Indian IT exports.
On-Site vs. Off-Site Services
Another key insight from the survey is the growing preference for off-site services. Off-site exports accounted for 90% of the total export of software services, a significant increase from the 80% recorded a decade ago. This shift highlights the changing nature of service delivery in the IT sector, as remote work and virtual collaboration become more prevalent.
Rising Demand for Off-Site Services
The rise in off-site services can be attributed to advancements in communication technology, the increasing acceptance of remote work, and the global demand for cost-effective IT solutions.
Private Limited Companies Leading the Charge
The RBI’s survey also shows that private limited companies recorded higher growth in software exports compared to public limited companies. This suggests that smaller, more agile firms are capitalizing on the global demand for IT services.
Contribution by Company Type
- Private Limited Companies: 57.8% share of total software exports
- Public Limited Companies: 40% share of total software exports
This data highlights the dynamic role of private enterprises in shaping the future of India’s IT exports.
Modes of Software Delivery
Cross-border supply remained the dominant mode of delivering software services, accounting for 83.5% of total exports in 2023-24. The share of overseas commercial presence, on the other hand, declined slightly.
Cross-Border Supply Leading the Way
Cross-border supply continues to grow as the preferred method of service delivery, while overseas commercial presence has seen a marginal decline, likely due to changing market conditions and the rising efficiency of digital solutions.
Total Software Services Exports Including Commercial Presence
When accounting for software services delivered by foreign affiliates of Indian companies, the total exports increased to US$ 205.2 billion. This demonstrates that Indian companies are not only exporting services but also establishing a strong presence overseas to cater to local markets.
The Future of Indian Software Exports
India’s software services exports are on a steady growth trajectory, supported by innovations in remote service delivery, strong demand from the US and Europe, and the resilience of Indian IT firms. The findings of the RBI survey emphasize the importance of staying competitive in a rapidly evolving global market.
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Conclusion
The 2023-24 RBI survey on software and IT-enabled services exports presents an optimistic outlook for India’s IT sector. With continued growth in both computer services and BPO, a strong presence in the US and Europe, and a rise in off-site service delivery, Indian software exports are set to remain a crucial part of the country’s economy.
FAQs on RBI’s Latest Survey on Software Exports (2023-24)
1. What is the purpose of RBI’s annual survey on software exports?
The RBI’s annual survey on software and IT-enabled services (ITES) exports aims to provide a comprehensive overview of India’s performance in the global IT services market. It offers insights into export trends, key markets, service categories, and the contribution of different types of companies in the software export sector.
2. How much did India’s software services exports grow during 2023-24?
India’s software services exports grew by 2.8% in the financial year 2023-24, reaching a total of US$ 190.7 billion. This growth highlights the strength and resilience of India’s IT sector, despite global economic uncertainties.
3. What types of services contribute the most to India’s software exports?
Computer services, which include software development, systems integration, and consulting, account for over two-thirds of India’s total software services exports. Business Process Outsourcing (BPO) also plays a significant role within the IT-enabled services (ITES) sector.
4. Which countries are the top destinations for Indian IT exports?
The United States remains the top destination, accounting for 54% of India’s total software services exports. Europe, particularly the United Kingdom, contributed 31%, making it the second-largest destination for Indian IT exports.
5. What currencies are most commonly used for invoicing Indian software exports?
The US dollar is the predominant currency used for invoicing Indian software exports, with a 72% share. Other significant currencies include the Euro (9.3%), Indian Rupee (7.1%), and British Pound (6.2%).
6. What is the difference between on-site and off-site software services, and which one is more popular?
On-site services involve deploying personnel to the client’s location, while off-site services are delivered remotely from the service provider’s location. According to the survey, off-site services dominate, accounting for 90% of total software exports in 2023-24. This represents a significant shift toward remote service delivery compared to a decade ago.
7. Why are off-site services becoming more popular?
The growing preference for off-site services can be attributed to advancements in communication technology, the rise of remote work, and the global demand for cost-effective IT solutions. Remote service delivery allows Indian IT firms to provide services efficiently across the globe.
8. Which type of companies contributed more to India’s software exports—private limited or public limited companies?
Private limited companies recorded higher growth in software exports compared to public limited companies. In 2023-24, private firms accounted for 57.8% of total software exports, while public limited companies contributed 40%.
9. What is the dominant mode of software delivery for Indian IT services?
Cross-border supply, where services are delivered from India to clients in other countries without establishing a physical presence, remained the dominant mode of software delivery in 2023-24, accounting for 83.5% of total exports.
10. How do Indian companies contribute to software services exports through foreign affiliates?
Indian companies with overseas commercial presence, such as subsidiaries or branches, also contribute to software exports. When factoring in services delivered by these foreign affiliates, the total value of software services exports increases to US$ 205.2 billion.
11. What is the outlook for India’s software services exports?
The future of India’s software services exports appears promising, with continued growth driven by strong demand from the US and Europe, innovations in remote service delivery, and the ability of Indian IT firms to adapt to global market trends. The RBI survey indicates that Indian software exports will remain a key component of the country’s economy.
12. How many companies were surveyed in the RBI’s 2023-24 report?
The RBI surveyed 2,266 companies that collectively accounted for 89% of India’s total software services exports. The survey contacted a total of 7,226 software companies to gather data.
13. What share of software exports is delivered via cross-border supply versus overseas commercial presence?
Cross-border supply accounted for 83.5% of the total software services exports in 2023-24, while the share of services delivered through overseas commercial presence declined slightly compared to previous years.