Indian IT companies came out with a stellar performance in the fiscal year 2021-22, registering a massive 88.8% increase in software service exports. This increase is regarding the services offered by IT companies to their clients based offshore. It was only comparable to the performance five years ago, when the IT companies registered a jump of 82.8%, as per the data compiled by the Reserve Bank of India (RBI) as part of its annual report.

It is stated that IT service exports have gone up by 17.2% to reach $151.7 billion during the financial year. The RBI data is comprehensive and includes services offered by Information Technology-enabled service (ITES) and Business Process Outsourcing (BPO) companies.

Geographies where the increase was the most recorded

BPO services accounted for nearly 84% of ITES exports. The United States and Canada were the top destinations accounting for 55.5% of the exports, while Europe came second with 31%.

In Europe, the United Kingdom, at 14.9%, contributed nearly half of the revenues generated by Indian IT companies. The survey stated that the billing was mainly done in dollar currency, followed by Euro and Pound Sterling.

While the share of BPO services dipped slightly to 27% from 28% the previous fiscal, the revenues increased from $37.5 billion to $42.3 billion. In the ITES, engineering services’ contribution declined from 6.7% to 5.2% and revenues from $8.9 billion to $8.2 billion, respectively. Computer services accounted for over two-thirds of total exports at 67.8%, of which IT services share was 64.9%, and software product development was 2.9%.

Total exports of software services, including services delivered by foreign affiliates of Indian companies, increased by 15.9% during 2021-22 and stood at $171.9 billion; local software business by foreign affiliates stood at $15.2 billion, with the United States being the major destination. The share of the United States in the software business by foreign affiliates of Indian companies was 42.5%, while that of the UK was 23.5%.

Private limited companies accounted for 60% of the total exports of software services, whereas exports by public limited companies declined during the year. On the modes of supplying services, the share of cross-border supply increased further to 80.9% in 2021-22; the share of the other three modes of delivery – consumption abroad, commercial presence and presence of natural persons, declined, the data stated.

As the RBI continues to share more information regarding this increase, we will be sure to update it on our blog. So, stay tuned! The RBI contacted 6,218 software export companies for the survey, while 2,074 firms responded. The annual report stated that the companies that replied accounted for 89.4% of the total IT exports for the year.