NASSCOM Report: Indian Tech SMEs’ Revenue Expected to Reach $40B by FY30
- ByStartupStory | March 29, 2023
According to a recent report by NASSCOM (National Association of Software and Service Companies), the revenue generated by small and medium enterprises (SMEs) in the Indian tech industry is predicted to reach $40 billion by FY30. With over 10,000 SMEs in the sector, it is expected to contribute around $15 billion-$20 billion, accounting for 7%-9% of the overall FY23 tech industry revenue. This represents a significant increase from the pre-pandemic share of 4%-6%.
The report emphasized the diversification of digital offerings across different geographies by the Indian tech SME segment. North America dominates, accounting for 50%-55% of the revenue generated, with a focus on specialized cloud, AI, IoT, and SaaS products. Following closely is Europe, with a share of 19%-20%. Indian SMEs have also expanded their footprint in non-traditional markets like Japan and Australia and are making inroads into the UAE and Saudi Arabia.
According to the report, SMEs in the digital technology industry have experienced a four-fold increase since 2019, largely due to rising investment in cloud, migration, SaaS, and AI-based solutions. The Indian tech SME sector is predicted to have a workforce of around 740,000 employees by the end of FY23. The report also noted that the demand for digital skills is increasing at twice the rate of traditional tech talent in FY20, indicating strong hiring prospects.
The report highlights cloud, digital engineering services, advanced AI/ML and analytics, and IoT and blockchain as crucial areas for digital talent in the Indian tech SME sector in FY23. As the sector moves towards digital services, innovative digital SMEs are integrating deep tech solutions into their functions and value chains, according to Debjani Ghosh, the President of NASSCOM. Ghosh further added that traditional tech SMEs must shift to digital to navigate challenging circumstances. The sector’s growth can be further boosted through fast-tracked innovation, supportive government policies and incentive schemes, and dedicated SME-industry-academia collaborations, which will help achieve the double digital revenue growth vision by FY30.
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