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Indian IT services industry body National Association of Software and Services Companies (Nasscom) expects software export growth to slow to 7-8 percent in the current financial year, the lowest revenue growth forecast in the last eight years.
Nasscom had, for the first time in 25 years, deferred the annual growth revenue guidance range in February, citing political and macroeconomic factors.
The IT services industry has been grappling with a slowdown in its banking and financial services business, which contributes a large chunk of revenues. It has also been hit by its retail clients facing a slowdown from the rise of online retail channels.
At its flagship industry event earlier this year, the Nasscom India Leadership Forum, the industry body had said that the IT industry grew by 8.6 percent in the current fiscal 2016-17, in line with its forecast of 8-10 percent last year.
Last November, Nasscom had lowered its annual forecast from 10-12 per cent, due to an adverse impact from Brexit in the UK, the US elections and stressed financial services spending.
The IT industry is going through a transformation in its business models as the IT market shifts to cloud-based and everything-as-a-service delivery models, which require less upfront expenditure, slowing overall growth of the sector.
Nasscom said on Thursday that the last fiscal year added USD 11 billion in revenue to Indian IT industry, and that the domestic market is expected to grow faster than export revenues. Nasscom attributed this to “relatively fast adoption of digital solutions by Indian enterprise”.
However, the domestic growth projection has also fallen from last year’s 11-13 percent.
Adding to the industry’s woes in the past year are protectionist policies in nearly all its big markets, including US, UK, Europe, Singapore and New Zealand. Nasscom said on Thursday that the industry is looking at newer markets such as Japan, Germany, Middle East, Africa and China with focus on digital solutions in this fiscal, in addition to a big focus on reskilling employees in areas such as cybersecurity and data science.
Nasscom and big Indian IT players have consistently denied news of mass layoffs this year, but confidence among the workforce is low. The industry body said it expects to add 1.3-1.5 lakh new jobs this year, and marked cloud platforms, business intelligence, cognitive technology and embedded technology as growth areas.
“Manoeuvring through an uncertain phase over the past year, the industry has maintained its status as a key net hirer in the country and global technology and services hub. Considering the evolution that the industry is undergoing due to the adoption of new technologies, it is imperative that we as an industry drive the skilling and reskilling of new and existing talent…,” said R Chandrashekhar, president, Nasscom, in a statement.
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