India aims to grow his information technology sector to $1 trillion by the year 2025, 20 percent of GDP. According to National association of Software and services companies, India's technology industry is expected to cross $245 in 2023 based on 8.4 annual growth rate.
The ICT sector and the Digital Economy contribute more than 13 of India GDP, making it one of largest economic drivers for the country. The technology industry, as a whole—comprising IT & business process management (BPM), IT exports and domestic sales; engineering research & development (R&D); hardware manufacturing including automotive electronics/AVPs for home units/domestic appliances/mobile handsets/consumer EMS products OEMs/manufacture of other electronic components licensed by CGFTP/NILT In 2022, India imported nearly $3 billion worth of computer and electronic equipment (NAICS code 334) from the United States.
Policy and Regulatory Environment:
India’s environmental management system is complex and often complicated. New regulations and business development plans are frequently announced in the country. The Digital Privacy Policy (DPDP) was enacted in August 2023 to protect the privacy of Indian citizens and protect personal data in the context of global digital business. It specifies the obligations of data processing entities, focuses on individual consent for data use, and ensures protection of children’s data. The bill allows data to be transferred across borders and takes a looser approach than previous drafts, giving the government the authority to mark certain countries that do not allow data t
ransfer. The bill clarifies that if any existing law in India provides for a higher level of control over the transfer of personal data outside India, the existing law will continue to be used. This will take precedence over existing laws prohibiting the transfer of information across borders, such as the Reserve Bank of India’s regional information requirements. The bill sets out the duties and responsibilities of a new regulatory body called the Data Protection Commission, which will impose financial penalties for data misuse, establish a complaint management system, and provide exemptions consistent with the bill’s requirements.
In September 2022, the Ministry of Telecommunications in India released the draft ‘India Telecommunications Bill, 2022’ to seek feedback from stakeholders. The bill seeks to amend the Indian Telegraph Act, 1885, the Indian Wireless Telegraph Act, 1933 and the Telegraph Wires (Illegal Possession) Act, 1950. Employment, terms and conditions, and remuneration. India has imposed customs duties ranging from 2.5% to 20% on imported ICT products over the last eight years. In March 2021, India introduced a digital tax known as a flat tax (digital services tax) of 2% of the consideration charged or received by an e-commerce owner for the products or services offered. The tax system came into effect in April 2020 and India will transition from the current flat tax system to the new global tax system in March 2024. The agreement covers two topics developed by the organization regarding tax issues brought about by the digitalization of the global economy. . Under the agreement, under certain conditions, the Indian Digital Services Tax (DST) taxes paid by US companies in India during the transition period will be effective against future taxes considered as Pillar 1 of the OECD agreement. The increased points will start from April 1, 2022, or March 31, 2024, whichever is earlier, until Pillar 1 is implemented. In return, the US committed to ending Section 301 trade restrictions on Indian goods and refraining from further trade under India’s existing DSTs until the Pillar 1 range is met. The meeting came into effect on March 31. The U.S. Department of Commerce, in cooperation with the U.S. Department of the Treasury, is monitoring implementation of the OECD/G20 Agreement on the Two-Pillar Solution on DST.
In December 2020, the Indian government issued a National Security Notification for Business to manage product security and prevent the presence of unsafe products on the phone number. The Indian government published a list of “Trusted Sources/Trusted Products” for Telecom Service Providers (TSPs) as a guideline. In June 2021, the Indian government launched a portal for TSPs and their suppliers to register and submit the required information.
US-based telecom equipment and product manufacturers must contact the TSP through this portal to obtain government equipment and approvals to sell their products and services in India .
Table: India’s IT Sector Spending and Industry Growth ($ billion)| Units: $ billion | 2021 Spending | 2021 Growth (%) | 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) |
| Communication Services | 24.38 | 5.7 | 24.45 | 0.3 | 24.70 | 1.0 |
| Data Center Systems | 3.18 | 14.4 | 3.53 | 11 | 3.48 | -1.4 |
| Devices | 49.53 | 37.3 | 48.49 | -2.2 | 47.85 | -1.2 |
| IT Services | 19.21 | 15.0 | 20.57 | 7.1 | 22.04 | 7.1 |
| Software | 11.25 | 19.9 | 12.63 | 12.3 | 14.36 | 13.7 |
| Overall IT | 107.54 | 22.1 | 109.66 | 1.9 | 112.43 | 2.6 |
Leading Subsectors:
Digital transformation: According to NASSCOM’s annual CXO Outlook Survey 2023, Indian companies continue to prioritize digital transformation with a focus on cybersecurity, cloud computing, AI, and data analytics. The company has set itself a revenue target of $350 billion by 2026. A growth of 11-14 percent. The key drivers for this growth include digitization and new services. Finance, financial services, insurance, manufacturing, retail, utilities, business, and entertainment sectors are all using digital innovation to transform their business models. According to Bain & Company, E commerce is expected to grow from $175 billion in 2022 to $1 trillion by 2030. India is the most attractive destination for
ecommerce due to its large consumer base, diverse population, limited resources and services, and supply chain ecosystem. 100%, India ranks 10th on the International Telecommunication Union’s Global Cybersecurity Index 2020. Security and management products and services include application security, cloud security, user security software, data privacy, data security security, privacy management, property protection, risk management, cybersecurity products, and security services. Businesses supporting the growth of cybersecurity include business, healthcare, insurance, capital markets, and information technology such as energy, oil and gas, defense bloc, transportation, and communication.
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