How technology is reshaping India’s industries

India’s digital transformation is not just accelerating its economy, it’s fundamentally changing how businesses operate and grow. With a robust policy framework, a flourishing startup ecosystem, and a tech-savvy workforce, India is rapidly adopting technologies across critical sectors like agriculture, healthcare, finance, and manufacturing.

This evolution places India among the top global players in digital innovation. The IT and business process management (BPM) industry alone contributed 7.4% to India’s GDP in FY2023 and employed over 5.4 million people. With US$245 billion in revenue and software exports accounting for more than half, India controls nearly 55% of the global IT and BPM outsourcing market.

From outsourcing to innovation

India’s IT story began with outsourced services but has evolved into a hub of high-value innovation. The government’s Digital India initiative and a growing number of tech unicorns are pushing the boundaries of artificial intelligence (AI), blockchain, cloud computing, and generative AI.

Major multinationals like Accenture, IBM, and Google continue to invest heavily in India’s R&D capabilities. This confidence is underpinned by the country’s deep technical expertise, cost competitiveness, and strong public-private collaboration that supports deep-tech startups and enterprise-level innovation.

Why multinational corporations are investing in India

Multinational corporations (MNCs) are no longer just outsourcing to India, they are embedding themselves into the digital fabric of the country. These companies are investing in local innovation centers and adopting new technologies across their India operations, including Industry 4.0 solutions, smart manufacturing, and digital agriculture.

India’s value proposition lies in more than just scale. MNCs benefit from:

• A large and growing consumer base.
• Competitive operational costs.
• A young and digitally literate workforce.
• Strategic policies supporting domestic production and foreign investment.

Where is digital transformation happening?

India’s technology adoption is most visible in four high-impact sectors:

• Agritech & food processing: Companies like Bayer and Syngenta are leveraging IoT and AI to enhance crop yield, optimize supply chains, and promote sustainable farming. Blockchain is also gaining traction in ensuring transparency from farm to fork.
• Manufacturing: Digitalization of India’s factories is advancing with predictive analytics, AI-enabled robotics, and real-time monitoring. Firms like Tata Motors and Bosch are pioneering smart factory initiatives to reduce downtime and improve productivity.
• Financial services & fintech: India’s Unified Payments Interface (UPI) system processes over 12 billion transactions monthly. AI-driven credit scoring and mobile-first platforms are widening access to banking, encouraging investment, and fostering entrepreneurship. Global firms such as JPMorgan and Citibank are expanding their digital footprints to serve this growing market.
• Healthcare & life sciences: AI-powered diagnostics, wearable health devices, and telemedicine are redefining healthcare delivery. MNCs like GE Healthcare and Siemens Healthineers are investing in AI-based imaging and digital patient platforms to tap into India’s growing demand for tech-enabled healthcare.

Skills gap: A challenge for sustained innovation

Despite leading in digital services, India faces a talent shortfall in advanced technology areas. Demand is growing for expertise in multi-cloud security, DevOps, AI/ML, and quantum computing, but current supply is limited. The cloud computing sector alone is projected to generate over 1 million jobs by 2026.

Programs like NASSCOM’s FutureSkills Prime and government-backed STEM education initiatives aim to bridge this gap. These efforts are vital for maintaining India’s global IT competitiveness and ensuring a pipeline of skilled professionals for emerging tech industries.

Policy shifts that matter to investors

India has introduced several regulatory and incentive frameworks to bolster its position as a digital leader:

Government Policy	Short Description	Target Sectors/Industry	Benefits for Foreign Investors
General Consent Certificate (GCC)	Simplifies regulatory approvals for offshore IT hubs	IT, BPM, R&D Centers	Streamlines investment approvals for MNCs establishing offshore IT hubs in India
Digital Personal Data Protection Act (DPDPA)	Strengthens data security and privacy laws	IT, Financial Services	Enhances data security and privacy, aligning India with global data protection standards
Production-Linked Incentive (PLI) scheme	Offers financial incentives for domestic manufacturing	AI, Semiconductor, Electronics	Encourages domestic manufacturing and foreign investment in deep-tech innovation
National Quantum Mission (NQM)	Supports research and development in quantum technologies	IT, AI, Cybersecurity, Research Institutes	Provides funding and infrastructure support for foreign investors in quantum computing

These frameworks demonstrate India’s commitment to building a secure, globally competitive tech ecosystem—and provide clarity for foreign companies considering local investments.

India’s strategic edge in the global digital economy

India’s advantage isn’t just its scale—it’s the convergence of policy support, innovation capacity, and sectoral digitization. With 30+ data centers, rising cloud adoption, and growing investments in robotics and automation, the country is fast becoming a preferred destination for digital infrastructure.

Sectors like electric mobility, semiconductors, and green technology are also drawing investor interest as India aims for greater self-reliance and sustainability.

What this means for investors and tech leaders

India is no longer just a destination for cost arbitrage—it’s a market of digital opportunity. For investors and global technology firms, the focus is shifting from outsourcing to co-innovation, local market development, and regional R&D hubs.

Whether entering the market or expanding operations, companies should assess:

• Sector-specific policies and incentives.
• Workforce readiness in targeted regions.
• Infrastructure for logistics, data centers, and power.
• Local partnership opportunities in innovation ecosystems.

How Tractus supports your digital strategy

At Tractus, we help multinational firms navigate India’s complex digital and regulatory environment. Our services include:

• Market entry and expansion strategies tailored to tech-driven sectors.
• Technology feasibility and implementation analysis to guide digital investments.
• Incentive negotiation and compliance support for government programs.
• Partner identification for R&D, innovation, and local operations.

With India poised to lead the next wave of the digital economy, now is the time to act. Let Tractus help you turn digital opportunity into long-term success.

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Authored by

Written by Priyanka Singh, Consultant based in the India office.