Categories and Importance of ICT Products

Every time you swipe a card at a store, video-call a classmate, or ask a smart speaker for today’s weather, you are relying on a product that falls under the umbrella of Information and Communication Technology, or ICT. For B.Com students studying the service sector, understanding how ICT products are classified is not just an academic exercise. It explains why India’s economy runs the way it does today, from the software exports that bring in billions of dollars to the mobile networks that connect a billion people. This post breaks down what ICT products actually are, the ten categories they fall into, and why this classification matters for a growing economy like India’s.

What exactly are ICT products? 🔗

The Organisation for Economic Co-operation and Development (OECD) is the body that provides the internationally accepted definition of this term. According to the OECD, a product qualifies as an ICT product if its primary function is to fulfil or enable information processing and communication, including transmission and display. This definition is deliberately broad because ICT products can be either physical goods, like a laptop, or intangible services, like cloud hosting.

This products-based definition complements the OECD’s separate definition of the ICT sector, which focuses on which industries produce ICT goods and services. The product definition itself is built on the United Nations’ Central Product Classification, which allows statisticians across countries to compare ICT output on a like-for-like basis. In simple terms, if a country wants to measure how much of its economy is genuinely “digital,” it needs a consistent list of what counts as an ICT product. That is exactly what this classification provides.

The ten categories of ICT products 🔗

The OECD framework groups ICT products into ten categories. The first five are largely goods-based, meaning they are physical items you can hold or install. The remaining five are services, meaning they involve expertise, connectivity, or access rather than a tangible object.

Why the goods-versus-services split matters 🔗

This distinction is more than a classification detail. Goods-based ICT products, like a router or a laptop, are typically traded across borders as physical shipments, tracked through customs data, and subject to import duties. Service-based ICT products, like an IT consultancy contract or a cloud subscription, are traded digitally and often fall outside conventional trade statistics. This is part of why India’s software exports are recorded differently from its electronics exports, even though both count as ICT products under the same umbrella.

Why these categories matter for India’s economy 🔗

India offers a good case study for why this classification is useful in practice. It shows both goods and services growing simultaneously, but at very different paces and for different reasons.

A major share of GDP and exports 🔗

The ICT sector, taken together, contributes over 13 percent to India’s GDP and is one of the country’s largest foreign exchange earners. Much of this contribution comes from the services side of the classification, particularly IT consultancy and business software. Industry revenue in this space has grown from around US$167 billion in FY18 to an estimated US$315 billion in FY26, with a large share of that coming from exports of software and IT-enabled services.

Building domestic hardware manufacturing 🔗

The goods side of the classification, especially computers, peripherals, and communication equipment, has historically been import-heavy in India. This is changing through targeted government support. The Production Linked Incentive Scheme for IT Hardware, run by the Ministry of Electronics and Information Technology, offers manufacturers a financial incentive on incremental sales of laptops, tablets, and servers made in India. The goal is to shift India from being primarily an assembler of imported components to a genuine manufacturing hub for computer and peripheral equipment, one of the core ICT product categories.

Expanding telecommunications access 🔗

Telecommunications services are the category most Indians interact with daily, and the numbers reflect a fast-moving market. Internet subscribers in the country rose from about 1,028.61 million in December 2025 to 1,092.79 million by March 2026, according to the Telecom Regulatory Authority of India. This scale of connectivity is what makes every other ICT product category, from software to consumer electronics, useful in the first place. A laptop without internet access, after all, is a fraction as valuable as one that is connected.

Powering digital transformation for businesses 🔗

Beyond large corporations, ICT products are reshaping how smaller businesses operate. Industry body NASSCOM notes that cloud-based tools and AI-enabled software are helping even small manufacturing units improve supply chain visibility and fulfilment accuracy, a shift that was largely out of reach for smaller firms before affordable software subscriptions and rental-based ICT models became common. This is a direct, practical example of the “leasing or rental services” and “business and productivity software” categories at work.

How ICT products connect to retailing and services 🔗

For students of the service sector specifically, it helps to see ICT products in action within retail. A modern retail business, whether a large chain or a small kirana store using a digital ledger app, depends on multiple ICT product categories simultaneously. Point-of-sale computers and card readers fall under computer and communication equipment. Inventory and billing software falls under business and productivity software. Payment gateway integration and customer support systems fall under other ICT services. None of this functions without reliable telecommunications services carrying the data between these systems in real time.

This layering is why economists increasingly treat ICT not as a standalone industry but as a general-purpose technology that touches nearly every other sector, including retail, banking, healthcare, and education. Recognising the ten-category structure helps in identifying exactly which part of a business’s technology stack is being discussed, whether it is the hardware sitting on a shop counter or the software running quietly in the background.

What do you think? 🔗

What do you think? Which ICT product category do you think will see the fastest growth in India over the next five years, hardware manufacturing or IT services? And can you spot all four or five ICT product categories at work the next time you shop online or make a digital payment?

References

1. https://www.oecd.org/en/publications/information-economy-product-definitions-based-on-the-central-product-classification-version-2_222222056845.html
2. https://www.trade.gov/country-commercial-guides/india-information-and-communication-technology
3. https://www.ibef.org/industry/information-technology-india
4. https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1732024&reg=3&lang=2
5. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2276780&reg=3&lang=1
6. https://community.nasscom.in/communities/digital-transformation/unlocking-indias-growth-engine-msme-digitalisation-imperative