Notwithstanding the increase in hiring in the US and Europe by Indian IT companies, the share of the off-site mode of exports of software services continued to increase and stood at 88.8 per cent in 2021-22 as compared with 82.8 per cent five years ago, according to RBI’s latest survey on IT exports.
India’s exports of software services (excluding exports through commercial presence) are estimated to have increased by 17.2 per cent to $156.7 billion during 2021-22.
The report noted that the US and Canada continue to be the top destinations for software exports with 55.5 per cent share, followed by Europe, of which, nearly half was attributed to the UK. In FY22, India exported $86.9 billion and $48.6 billion in IT services to the US and Europe, respectively. Exports have only increased to the three geographies in 2021-22.
The report comes against the backdrop of US and European enterprises tightening their IT budgets. Indian IT majors are already reporting and responding to these trends, slashing variable pay for their employees and hiring at a moderated pace.
Computer services continued to account for over two-thirds of total software services exports, and business process outsourcing services accounted for nearly 84 per cent of exports of IT-enabled services. The US dollar remained the principal invoicing currency for software exports, followed by the euro and pound sterling.
For the 2021-22 round of the survey, as many as 6,218 software export companies were contacted, of which 2,074 companies, including most of the large companies, responded. The responding companies accounted for 89.4 per cent of the total software services exports during the year.