India - Country Commercial Guide
Information and Communication Technology

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-10-22


Contributing over 13 percent to India’s GDP, the Information and Communication Technology (ICT) sector and the Digital Economy are major economic drivers.  India’s digital economy generates approximately $200 billion annually from information technology (IT) and business process management (IT-BPM), IT-enabled services (ITeS), E-Commerce, electronics manufacturing, digital payments, and digital communication services.  India aims to reach a $1 trillion digital economy and a $5 trillion GDP by 2025.  Gartner forecasts that IT spending in India will increase by 6 percent to $81.9 billion in 2021.  While the COVID-19 pandemic has impacted India’s digital transformation, companies are realigning their IT strategies, managing operational costs, automating processes, and implementing new systems for better and improved efficiencies.  These efforts are being realized with the help of emerging technologies such as robotic process automation, big data, artificial intelligence, machine learning, blockchain, cloud computing, the internet of things, cybersecurity, and augmented/virtual reality. 

Below is a snapshot of India’s IT spending forecast:

  Units: $ billion

2019 Spending 

2019 Growth (%) 

2020 Spending 

2020 Growth (%) 

2021 Spending 

2021 Growth (%) 

Data Center Systems 







Enterprise Software 














IT Services 







Communications Services 







Overall IT Spending 







Source: Gartner (November 2020) 

Fast Facts: 

With the fifth highest GDP in the world, 1.35 billion citizens, and a rising middle class, India is a top market offering tremendous opportunities. 

India imported over $2.2 billion in computer and electronic equipment (NAICS code 334) from the United States in 2017.

India has emerged as the second largest manufacturer of mobile handsets in the world. 

At 1.2 billion (1.18 billion wireless and 20 million wired), India has the second largest number of telecom subscribers in the world. 

India has 778 million (755 million wireless and 22 million wired) broadband subscribers. 

The Indian telecom sector is the second largest in the world by the number of subscribers, and India’s mobile economy has been driven by widespread adoption, with wireless subscriptions representing 98 percent of telephone use.  India’s telecom sector was growing rapidly with the introduction of in-flight connectivity, plans for the rollout of 5G services to provide seamless coverage, high-speed data, low latency, and highly reliable communication.  However, the COVID-19 pandemic altered this environment, and remote work has increased the demand for telecom and internet services, and the adoption of the digital environment.    

The Indian Department of Telecommunications (DoT) issued new guidelines for Other Service Providers (OSPs) and enabled the IT industry, mainly IT-BPM and ITeS companies, to work from home with less compliance burden.  To advance India’s 5G telecom infrastructure, the DoT approved a grant for a multi-institute collaborative project to set up an indigenous “5G Test Bed” in the country.  The project aims to enhance national capability in telecom technology, develop indigenous intellectual property, and support local manufacturing.   

The Telecommunications Standards Development Society, India (TSDSI) has received approval for its 5G Radio Interface Technology (5Gi) from Study Group Five of International Telecommunication Union Recommendation Sector as part of ITU-R recommendation M. [IMT-2020-SPECS].  The Telecom Regulatory Authority of India (TRAI) submitted its recommendations on the auction of spectrum in 700 Mega Hertz (MHz), 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, and 3400-3600 MHz Bands in August 2018.  In February 2019, TRAI also released a white paper entitled Enabling 5G in India, which highlights the specifications of 5G technology, architecture of 5G networks, case studies, investment opportunities, spectrum requirements, and regulatory challenges for the deployment of 5G in India.  India’s DoT approved the applications of telecom companies Reliance Jio, Bharti Airtel, Vodafone Idea, and MTNL to conduct 5G trials in May 2021.  The government expects 5G services to be rolled out by early 2022.   

In December 2020, the GOI created a “National Security Directive on Telecommunication Sector” to maintain supply chain security and discourage insecure equipment in the country’s telecom network.  The GOI will declare a “Trusted Source/Trusted Product” list for Telecom Service Providers (TSPs).  In June 2021, the GOI launched its portal for the registration and submission of required documentation by the TSPs and their vendors.  U.S. telecom equipment/product suppliers must contact TSPs for supply and approval from the government on this portal in order to sell their products and services in India   

The broadcasting sector is comprised of television and radio services.  India is the world’s second-largest television (TV) market after China.  At the end of March 2020, there were about 212 million households in India served by cable TV, DTH (direct to home satellite TV), HITS (headend in the sky satellite TV), and IPTV (internet protocol television) services, in addition to the Doordarshan TV network (India’s public broadcaster).  The pay-TV customer base consists of around 103 million cable TV subscribers, 70.26 million active DTH subscribers, and 2.15 million HITS subscribers.  The TV broadcasting sector encompasses 359 broadcasters, 39 of which are pay broadcasters. 

The major ICT centers in India are Bengaluru (formerly Bangalore, also known as the Silicon Valley of India), Hyderabad, and Chennai in South India; New Delhi and Gurugram in North India; and Mumbai and Pune in West India.  India has a well-organized distribution system and a base of major global ICT distributors.  ICT companies can sell their products directly and through local partners such as system integrators and value-added resellers.  

Regulatory Environment 

India has a complex and often challenging regulatory environment, and new regulations and industry promotion schemes are announced frequently at the national level.  India recently announced new bills and guidelines impacting data protection, privacy, cross-border data flows, and data localization.  The GOI has introduced the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules in 2021; a draft Personal Data Protection Bill (PDPB), a Non-Personal Data Governance Framework, a National Cyber Security Strategy in 2020 (NCSS 2020); a draft National E-Commerce Policy, a National Digital Communication Policy in 2018 (NDCP-2018); a National Policy on Electronics and a National Policy on Software Products in 2019.  

The draft PDPB is currently being reviewed by a Joint Parliamentary Committee, and stakeholders have had an opportunity to share their views.  After consultations with the Ministry of Law and Justice, the final bill will be considered by the Parliament.  India is expected to establish a new Data Protection Authority, as well as data privacy and protection regulations and guidelines by 2023.  The Bureau of Indian Standards recently published India’s Data Privacy standard “Data Privacy Assurance – IS 17428 (Part 1: Engineering and Management Requirements, and Part 2: Engineering and Management Guidelines).  In September 2020, a committee of experts drafted the Non-Personal Data Governance Framework with stakeholder input, and the revised draft was again open for consultation through January 2021.  The NCSS-2020 is expected to be released this year.  The NCSS-2020 Task Force has held several consultations and collected inputs from stakeholders to formulate this new strategy document.  The document’s purpose is to ensure a “safe, secure, trusted, resilient, and vibrant” cyberspace. 

Customs duties and tax regimes are also important factors in India’s market.  Over the past eight years, India has applied customs duties ranging from 2.5 to 20 percent on imported ICT goods.  India’s status as a signatory to the WTO Information Technology Agreement notwithstanding, the scope of products subject to customs duties is likely to expand.   

In March 2021, India instituted a digital tax, known as the Equalisation Levy at the rate of two percent of the amount of consideration received or receivable by an E-Commerce operator from its supply of goods or services; the levy became effective on April 1, 2020.  U.S. companies should consider consulting experts concerning tax issues, data localization, and compliance requirements in India. 

Leading Sub-Sectors 

Digital Transformation:  According to the National Association of Software and Services Companies (NASSCOM), technology investments by Indian enterprises in India grew at an approximate four percent compound annual growth rate (CAGR), from $38 billion in 2017 to $45 billion in 2021.  Major drivers of this growth include digitalization and the modernization of services.  The banking, financial services, and insurance (BFSI), manufacturing, retail, consumer packaged goods, media, and entertainment industries are all adopting digital innovations to transform their business models.  Enterprises are adopting new tools and technologies such as chatbots, natural language processing, robotic process automation, cognitive analytics, security operations centers, internet of things (IoT), 3D printing, data analytics, cloud computing, artificial intelligence, connected vehicles, blockchain, and augmented/virtual reality to improve services and experiences for their customers. 

E-Commerce:  India’s E-Commerce market is one of the fastest growing in the world, and according to NASSCOM, is expected to reach $100 billion by 2025.  Although E-Commerce commerce initially witnessed a steep decline due to the COVID-19 lockdown, it then realized accelerated growth across segments including hyperlocal delivery, digital education, food delivery, digital health, digital media and entertainment, and online payments as people adopted digital solutions to meet their needs.  India has emerged as a preferred destination for online marketplaces due to its large consumer base, diverse demography, low-cost digital infrastructure and services, and supply chain ecosystem.  Consumer electronics goods and accessories are the largest e-tail segments in the E-Commerce sector.   

Cybersecurity:  With a score of 97.5/100, India ranked as the tenth best country in the world in the International Telecommunication Union’s (ITU) Global Cybersecurity Index 2020.  India’s cybersecurity service industry is growing rapidly as the country’s digital economy and critical infrastructure sectors expand, and it is expected to reach $7.06 billion by 2022 according to the Data Security Council of India (DSCI).  DSCI projects the industry could further expand to $13.6 billion by 2025.  The number of Indian cybersecurity startups grew from 175 to 225 from 2018 to 2020, and revenue during the same period more than doubled from $475 million to $1 billion.  Leading industry sectors driving cybersecurity growth are BFSI, IT, ITeS, and government spending.  With expenditures growing at a CAGR of 18 percent, BFSI is the largest driver of growth in the sector.  The GOI’s cybersecurity needs are focused on critical information infrastructure for banking, telecommunications, transportation, defense, security, power, and utilities.  Other sectors such as energy, healthcare, and automotive are projected to increase their cybersecurity spending from $630 million in 2019 to $949 million in 2022.  

FinTech and Digital Finance:  India is one of the fastest-growing Financial Technology markets globally.  Digital payments are the primary driver of growth in this space, followed by digital lending, and other tech-enabled financial services.  According to Invest India, the Indian FinTech market is currently valued at $31 billion and expected to grow to $84 billion by 2025.  FinTech transactions are poised to reach $138 billion in 2023, more than double the $66 billion in 2019.  The Indian FinTech industry is the result of a combination of technological enablers, regulatory interventions, and business opportunities with certain characteristics unique to India.  The Reserve Bank of India, as India’s central bank and regulator of payment systems, has taken several measures contributing to the evolution of the FinTech ecosystem in India.   


According to Gartner, government IT spending is expected to grow by 9.4 percent annually to $7.3 billion in 2021, up from $6.6 billion in 2020.  In the Union Budget 2021-22, the government of India allocated $205 million to boost digital payments, and $516 million for the digital census program.  In December 2019, the government rolled out the National Broadband Mission (NBM) to enhance digital communication infrastructure aiming to increase India’s fiber footprint to 5 million route kilometers and increase the number of fiber-connected towers by 60 percent by 2022.  The mission estimates an investment of $100 billion, including $35 billion for telecom towers, $30 billion for optical fiber infrastructure, and $35 billion for spectrum and research and development.  India is banking upon its optical fiber infrastructure for the rollout of 5G services, which offers opportunities for U.S. companies to supply optical fiber cable, 4G/5G radio equipment, radio frequency frontends and antenna sub-systems, small and large 5G cells, wireline and radio access network solutions, and transmission links.

As part of the National Policy on Electronics 2019, the Indian government launched several schemes for the promotion of electronics manufacturing under the Make in India strategy.  India aspires to become a global hub for Electronics System Design and Manufacturing (ESDM), and the country’s demand for electronics hardware is expected to reach $400 billion by 2025.  India’s production of electronics grew from $29 billion to $75.7 billion from 2014 to 2020, and the country’s share of global electronics manufacturing grew from 1.3 percent in 2012 to 3.6 percent in 2019.  The production of mobile handsets rose to 330 million units in 2020, up from just 60 million units in 2014.  The government wants suppliers to provide affordable 5G handsets/devices to further its Digital India mission, and this presents an opportunity for U.S. exporters to supply electronic components, semiconductor/display fabrication units, assembly/test/marking/packaging units, specialized sub-assemblies, and capital goods.

India has recently launched a draft data center policy, and aspires to become a global Data Center Hub with an investment of $4.9 billion by 2025.  While India’s leading companies have announced their plans to set up data centers, U.S. major cloud service providers have already done so in India to serve enterprises as the government pushes data localization requirements.  Indian businesses are rapidly shifting their operations digitally and adopting cloud services to minimize costs.  This opens the door for U.S. companies to supply data center hardware, computing resources, data storage systems, network infrastructure equipment, and submarine cable networks.  

Major trade events 

  • Infocomm India, India Mobile Congress, CyFy, Convergence India, and the Smart Cities India Expo. 

For more information, contact Commercial Specialist Sudhir Kesharwani.