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: 2020-08-25


India’s Information and Communication Technology (ICT) sector and digital economy are major economic drivers powering the growth and modernization of India’s economy.  India’s ICT sector contributes over 13 percent to India’s Gross Domestic Product (GDP) and India’s digital economy generates about $200 billion annually from business process management (IT-BPM), e-commerce, domestic electronics manufacturing, digital payments, digital communication services (including telecom), etc.  India aims to achieve a $1 trillion digital economy and a $5 trillion GDP by 2025.  India’s IT-BPM revenue is expected to grow 7.7 percent from $177 billion in FY2019 to $191 billion in FY2020 according to the NASSCOM technology industry association.  India witnessed exponential growth (1,800 percent) in the IT services and business process management industry from 1999-2009 and added another $68 billion in revenue during the past decade to reach $177 billion in FY2019. 

Fast Facts:

  • India is a top global market offering tremendous opportunities with 1.35 billion citizens and a rising middle class
  • India imported over $2.2 billion in computer and electronic equipment from the U.S. in 2017 (NAICS code 334)
  • India has emerged as the 2nd largest manufacturer of mobile handsets in the world
  • India has the 2nd largest telecom network in the world in terms of subscribers
  • 1.17 billion (1.15 billion wireless and 20 million wireline subscribers) telecom subscribers (as of January 2020)
  • 673 million (654 million wireless and 19 million wireline subscribers) broadband subscribers (as of January 2020)
  • 1.25 billion digital identity numbers issued to citizens (as of June 2020)
  • The ICT market is forecast to reach $191 billion in FY2020 and is projected to grow to $350 billion by 2025

The Digital India initiative aims to improve digital infrastructure and internet connectivity. This and other major government initiatives will drive growth in the ICT sector and open opportunities for U.S. companies.

The Indian telecom sector is the second largest in the world in terms of the number of subscribers. India’s growing mobile economy is driven by widespread mobile adoption with 98 percent of all telephone subscriptions being wireless.   This sector has been growing rapidly based on affordable prices for consumers, wide availability of services, roll out of 3G and 4G infrastructure and services, higher consumption of data, and a conducive regulatory environment. To advance the telecom infrastructure with a 5G system in India, 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 on August 1, 2018. TRAI launched a whitepaper on “Enabling 5G in India” on February 22, 2019 highlighting specifications of 5G technology, architecture of 5G networks, case studies, investment opportunities, spectrum requirements, and regulatory challenges for the deployment of 5G in India.

The broadcasting sector comprises television and radio services. India is the world’s second largest television (TV) market after China. India’s television industry grew about 12 percent from $8.8 billion in 2017-18 to $10 billion in 2018-19. At the end of 2019, there were about 298 million households in India, and about 197 million households had television sets served by cable TV services, DTH (direct to home satellite TV) services, HITS (headend in the sky satellite TV) services, IPTV (internet protocol television) services, in addition to the terrestrial TV network of Doordarshan (the public broadcaster). The pay TV customer base consists of around 103 million cable TV subscribers, 72.44 million active DTH subscribers and 1.5 million HITS subscribers.  The TV broadcasting sector encompasses 350 broadcasters, and 39 of these are pay broadcasters.

Major ICT centers in India include Bengaluru (formerly Bangalore, also known as the Silicon Valley of India), Hyderabad, and Chennai in South India; New Delhi and Gurugram (formerly Gurgaon) located outside of New Delhi in North India; and Mumbai and Pune in West India.   

India has a well-organized distribution system and major global ICT distributors are active in India.  Companies can sell directly, but it is advisable to create a local presence in India through an agent, representative, or distributor.  Direct sales, as well as using partner system integrators and value-added resellers (VARs) is common.  Subscription-based sales on cloud platforms are also common.

Regulatory Environment

The Indian government has a complex and often challenging regulatory environment. New regulations and industry promotion schemes are announced frequently at the national level. Recently, India has announced new bills and guidelines impacting data protection, privacy, cross-border data flows, and data localization.  It introduced the Information Technology Intermediary Guidelines Rules 2018, a draft Personal Data Protection Bill, National Cybersecurity Strategy 2020, draft E-Commerce Policy, National Digital Communication Policy, National Policy on Electronics 2019 and National Policy on Software Products 2019 as it aims to develop the digital economy.

The draft Personal Data Protection Bill of 2018 was revised and tabled in Parliament in December 2019.  This Personal Data Protection Bill 2019 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 may be considered by the Parliament.  India is expected to establish a new Data Protection Authority as well as privacy and data protection regulations and guidelines in the next two years.

The National Digital Communications Policy – 2018 (NDCP-2018) was approved by the Union Cabinet in October 2018 after several rounds of stakeholder consultations and recommendations. NDCP-2018 aimed to achieve objectives by 2022 including:

  • Increase broadband internet availability
  • Create 4 million additional jobs in the digital communications sector
  • Enhance the contribution of the digital communications sector to 8 percent of India’s GDP from 6
    • percent in 2017
  • Increase manufacturing in India and enhance India’s contributions to global value chains
  • Ensure digital sovereignty.

The National Cyber Security Strategy 2020 (NCSS-2020) is expected to be rolled out in 2020 in the parliament. The NCSS-2020 task force has held consultations and collected inputs from stakeholders to formulate the new strategy document.  The new strategy document aims to ensure a safe, secure, trusted, resilient, and vibrant cyber space.

India has rolled out some digital taxes and is considering additional measures.  It is advisable for U.S. companies to consider consulting experts about tax issues, data localization, and compliance requirements in India. 

Leading Sub-Sectors

IT services: The Indian IT services sector is expected to grow 6.7 percent from $91 billion in FY 2019 to $97 billion in FY2020 despite the pandemic.  Major growth factors include digitalization and modernization of the services.  The development of new tools and technologies like chatbots, natural language processing (NLP), robotic process automation (RPA), cognitive analytics, security operations center (SOC), cloud, internet of things (IoT), 3D printing, data analytics, cloud computing, artificial intelligence (AI) for public services, connected vehicles, blockchain, augmented reality (AR) and virtual reality (VR) etc., have transformed banking financial services and insurance (BFSI), manufacturing, public sector, retail and logistics industry.

E-Commerce: e-Commerce business recorded 25 percent growth from $43 billion in FY2019 to $54 billion in FY2020.  India has emerged as a preferred destination for online marketplaces due to the 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 segment in the e-Commerce sector.  Travel, hospitality, grocery and food delivery businesses are the fast-growing digital segments.  E-Commerce is slowly catching up to standard sectors like healthcare services, pharma, jewelry, smart mobility (ride sharing), media and entertainment.

In June 2020, USTR initiated a Section 301 investigation into India’s Data Equalization Levy.  The GOI enacted its budget through the India Finance Act 2020 on March 27.  The legislation included several provisions that had not been previously included in versions circulated to the public, notably an expansion of the scope of the “equalization levy” to include multinational firms’ e-commerce transactions – rules that do not apply to Indian firms.  Embassy technology sector contacts assess that the definitions of “e-commerce operator” and “e-commerce supply or services” are broad in scope and likely to cover various digital transactions and services, including the sale of data, though the scope of the bill is vague making compliance difficult.  Tech sector representatives related that the rules also enact taxes on the repatriation of profits to foreign parent firms.  The levy went into effect on April 1 with the first duties to be collected in mid-July. 

Cyber security: India’s cyber security market is growing rapidly as India’s digital economy and critical infrastructure sectors expand, and it is expected to reach $3.05 billion by 2022, at a compound annual growth rate (CAGR) of 15.6 percent from $1.97 billion in 2019.  Leading industry sectors driving cyber security growth are banking and financial services industry (BFSI), information technology, information technology enabled services (ITeS), and government.  BFSI is the largest spender in the cybersecurity sector, which is growing rapidly at a compound annual growth rate of 18% in terms of spending.  The Government of India’s cybersecurity needs are focused on critical information infrastructure for banking, telecommunications, transportation, defense, security, power and utilities.  Other sectors like energy, healthcare and automotive are expected 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 digital payments and finance markets globally, projected to cover $1 trillion in transactions by 2029 – representing about 60 percent of retail transactions as well as small business credit disbursement.  The digital payments value of $65 billion in 2019 is expected to grow at a CAGR of 20 percent to $140 billion by 2023.  Per capita digital transactions grew from 2.4 to 22.42 during 2014-2019 and has the potential to grow to 220 by 2021.


The government launched the National Broadband Mission (NBM) in December 2019 to enhance digital communications infrastructure, bridge the digital divide, facilitate digital empowerment and inclusion, and provide widespread affordable broadband.  The NBM includes laying 3 million route kilometers of optical fiber cable and increasing tower density from 0.42 to 1.0 tower per thousand of population by 2024.  The mission aimed to generate $100 billion in investment including $35 billion for telecom towers; $30 billion for optical fiber infrastructure, and $35 billion for spectrum, R&D and other network resources.

The Indian government launched schemes for the promotion of electronics manufacturing under the Make in India strategy as part of the National Policy on Electronics 2019.  India aspires to become a global hub for Electronics System Design and Manufacturing (ESDM).  India’s production of electronics grew from $29 billion to $70 billion from 2014 to 2019.  Production of mobile handsets in 2019 reached 290 million units worth $22.66 billion from just 60 million units worth $2.52 billion in 2014.  India’s exports of electronics increased from $5.1 billion in 2015 to $8.25 billion in 2019, India’s share in global electronics production reached 3 percent in 2018 from just 1.3 percent in 2012.

Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing,

Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)

Modified Electronics Manufacturing Clusters (EMC 2.0)

The government sanctioned $7 billion for schemes to attract manufacturing companies to India to expand the electronic manufacturing ecosystem. This brings an opportunity for U.S. exporters to supply machinery and production equipment, electronic components, process equipment, and other ICT services for new manufacturing facilities.


Ministry of Electronics and Information Technology, Government of India   

Telecom Regulatory Authority of India                                          

Mandatory Testing and Certification of Telecom Equipments (MTCTE) 

The National Association of Software and Services Companies (NASSCOM)     

Internet and Mobile Association of India                                          

Indian Software Product Industry Round Table                             

Manufacturers’ Association for Information Technology

India Electronics and Semiconductor Association                              


Major trade events

Infocomm India  

India Mobile Congress


Convergence India

For more information, please contact:

Sudhir Kesharwani, Commercial Specialist

U.S. Commercial Service, New Delhi

Tel: +91 11-23472274