Indian Tech Industry Grows 3.8% to Reach $254 Billion in FY24, Employs 5.43 million Professionals
The industry remains a significant contributor to the country’s economy, employing 5.43 million people with a growth rate of 1.1% in the same period.
New Delhi: Despite a challenging year, the Indian technology industry has shown resilience, growing by 3.8% year-on-year to reach a valuation of $254 billion in FY24, according to a report released on Friday.
Table of Contents
The industry remains a significant contributor to the country’s economy, employing 5.43 million people with a growth rate of 1.1% in the same period.
Also Read: India’s Internet Subscribers Reach 971.5 million in Q2 of FY2025: TRAI Report
Key Drivers: Generative AI, Cloud, and Cybersecurity
The Indian tech industry has seen substantial growth in areas such as Generative AI, cloud technologies, and cybersecurity, which are key drivers of the sector’s ongoing evolution. According to Grant Thornton Bharat’s ‘2025 Tech Trends Report’, the industry’s growth was propelled by technological advancements and the expanding demand for new tech skills in these areas.
Expansion in Tier 2 and Tier 3 Cities
To address the growing talent shortage, the Indian tech sector has been focusing on expanding its presence in tier 2 and tier 3 cities. This approach is seen as essential for tapping into the vast talent pool outside the major metropolitan hubs.
Raja Lahiri, Partner and Technology Industry Leader at Grant Thornton Bharat, highlighted that the Indian tech companies need to navigate business growth challenges and seize new opportunities emerging from Generative AI and other innovative technologies in 2025.
Aerospace, Defence, and Automotive: Key Sectors for Growth
India’s focus on Generative AI and Engineering Research and Development (ER&D) services has driven a remarkable 7.4% growth in these areas, with aerospace, defence, and automotive sectors leading digital engineering projects.
India’s Position as a Tech Hub
India remains a global hub for technology innovation with 1,700 global capability centres (GCCs). The country’s robust start-up ecosystem and continuous investor interest have further strengthened its position. According to the report, India is expected to continue dominating the global technology services market, driven by its highly skilled tech talent and digital transformation expertise.
Industry Outlook: Recovery in 2025
Despite challenges such as slowing revenue growth and rising employee costs in FY24, the Indian tech industry is poised for a moderate recovery in 2025. Key drivers like Generative AI, SaaS, and digital transformation projects are expected to contribute to this recovery.
Challenges and Opportunities Ahead
The industry must focus on strategic investments in innovation and cost containment to navigate economic uncertainties while maintaining its competitiveness. Indian firms must also create a culture of excellence in quality, innovation, and customer experience to retain their leadership in the global tech market.
India’s Deeptech Ecosystem and Future Potential
India’s deeptech ecosystem, which comprises over 3,600 start-ups, showcases immense potential in AI, space technology, and health tech. The report emphasizes that Generative AI deployment—including use-case selection, governance, and operational efficiency—is vital for long-term value creation and should be a cornerstone of every organization’s digital transformation journey.
Key Highlights:
- Indian tech industry grew by 3.8% in FY24, valued at $254 billion.
- 5.43 million people employed in the sector, with a 1.1% growth in employment.
- Generative AI, cloud technologies, and cybersecurity driving growth.
- Expansion into tier 2 and tier 3 cities to address talent shortages.
- 7.4% growth in ER&D services, with aerospace, defence, and automotive sectors leading.
- India remains a key player in the global technology services market with 1,700 GCCs.
- Challenges in revenue growth and employee costs, but recovery expected in 2025.
The Indian technology industry is poised for continued success, with a strong focus on innovation, Generative AI, and digital transformation driving its growth and future potential in the global tech market.
