EMERGING INDIA AS A TECH HUB IN MODERN TURBULENT TIMES
The post-Covid era has been full of ups and downs, and projections clouding us to see a clear future. Amid the difficult situation as offshoring increased in the IT sector, India has become a rising tech star. How?
The cadence of the Post-Covid era
We have all changed how we operate during the post-Covid-19 crisis. Some changes got forced on us; others represented the height of innovation in a difficult situation. There has been a reset of the workforce, employer/employee relationship, and the business ecosystem. For some companies, the impact of the pandemic has been positive; for some, apocalypse.
The phases of the Covid-19 pandemic are still in progress. In general, today’s environment is economically ambiguous.
- The record inflation in the United States (inflation rate of 7.1% in Dec 2022 from 2.5% in Jan 2020).
- The government’s fiscal responses contribute to recession concerns, but the credit and term spread signal lower risk.
- Unemployment remains at the multidecade lows and is likely to rise.
- And then, global geopolitical instability after Russia invades Ukraine.
Offshoring of IT and the rise of India
Accelerating the right digital initiatives lies at the core of must-take actions in today’s economy. Lessons learned from prior downturns show that industry leaders accelerate in economic downturns by boldly investing in digital initiatives. According to the latest forecast by Gartner, Inc., worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.1% from 2022.
Companies are opting to augment their tech teams with offshore talent to tackle the squeeze of persistently high inflation and limit expensive talent. Successful offshoring requires a stable, low-risk environment that enables a business to operate seamlessly.
A key recipient of a large inflow of offshoring work has been India. Encouraged by attractive fiscal incentives, an investment-friendly environment, and lower living costs, overseas companies are embracing offshoring strategies and transferring activities of specific business processes to India, particularly IT.
As per the growth forecast by the IMF, India will remain one of the fastest growing economies globally for the financial year 2022-23, where GDP growth projections currently stand at 7.4% – being more than twice the rate forecast for China (3.3%) and three times higher than the United States (2.3%). India’s exports of software services climbed 17.2% in the 2021-22 period, reaching an estimated total of US$156.7 billion.
India for the future of tech work