Indian software and services companies are likely to see their revenue from exports to grow by 10-12% to $119-121 billion, during the next fiscal year that begins April 1, industry body Nasscom forecast on Thursday. The companies are likely to see their export revenues grow by 12.3% — at the lower end 0f 12-14% forecast – during the current fiscal that ends March 31, it said.
”The world looks certainly uncertain on the macro” BVR Mohan Reddy, chairman of Nasscom said.
The industry body said that political instablities in Europe such as the migrant crisis, and the ISIS expansion in the Middle East were affecting growth. The sector is also facing challenges in some other markets, where elections are due, including the US, since political leaders take protectionist view and against outsourcing of jobs to India.
The slump in global crude oil prices, slowdown in China’s economy, and negative currency movements, especially of the US Dollar, Greater British Pound, Euro, and the Australian dollar is affecting growth, it said. Technology companies get more than 60% of their work from companies in the US., and about 20% of projects from U.K.-based companies.
The forecast for the next fiscal and the current fiscal does not augur well for the industry and the country’s economy, as the technology sector is one of the largest contributor to India’s GDP through exports of software and services. Technology companies have a 9.3% relative share of the GDP, while they constitute more than 45% of total services exports from the country.
The estimates comes at a time when exports from half of the 30 sectors were in the negative zone in December, while the total exports declined 15% to $22.2 billion, pushing up the trade deficit to a four-month high of $11.66 billion, according to government data. The exports had also fallen in November by 24.43%, the data showed.
The sector is also the largest private sector employer with 3.5 million people, and the second biggest in the country in terms of number of people employed, after the Indian Railways. A slower growth would mean bad news for the entire economy.
In the domestic market, technology companies are likely to see their revenue grow by 10% during the current fiscal to reach Rs1410 billion, while for the next fiscal it is estimated to grow by 11-13% to Rs1560-1590 billion, the National Association of Software and Services Companies, or Nasscom, said in its annual projections.
At home, the growth is likely to be fuelled by the burgeoning e-commerce segment in the coming fiscal, and government’s initiatives such as Smart City, Digital India and focus on Start-up ecosystem, it said. During the current fiscal e-commerce segment added $17 billion to the industry’s revenue.
The technology companies have kept their jobs addition flat at about 2 lakh people during the next fiscal year, taking the total to 3.7 million, Nasscom added.