After witnessing a gloomy year of budget cuts and pricing pressures, the Indian IT-BPO industry looks out of the woods and is on the path of recovery in key markets like the US. The $71-billion industry is all set to touch $285 billion by 2020, growing at a CAGR of 15%, according to a report released by KPMG and ASOCIO. ?India?s capability to maintain cost competitiveness and large workforce with required skill sets would be the favourable factors driving the growth in the sector, it said. ?Nasscom last week forecast that India’s software and services exports will post double-digit export revenue growth of 13 to 15 % to hit up to $57 billion in the year to March 2011.
Nasscom, chairman, Pramod Bhasin, said that 80% of the new opportunities in the next 10 years would come in from public services and governance, innovation of products in destructive technology, research and development of engineering services amongst others. ?New business models involving cloud computing, software as a service, mobile expertise would evolve going ahead especially for sectors like healthcare, education, financial services and insurance,? he said.
However, the industry will continue to witness protectionist pressures besides fiscal deficit and unemployment representing challenge to our growth. ?The rising or stable unemployment (in the US) is the single largest issue that the industry continues to face. While non-tariff issues like visa norms and availability and lack of domestic infrastructure and education continue.?
Bhasin added that the extent of the downturn in the US — which is the main market for India’s software giants — is still unclear. But with unemployment in the US running at just below 10 %, there are calls for protectionist action to protect jobs, he added.
The KPMG-ASOCIO ?Asia-oceania vision 2020? report also?points out that contribution from developed nations like Japan, Australia and New Zealand in the regional demand for IT-BPO service is likely to decrease. However, contribution from developing countries like India and Thailand is expected to increase in the coming years. Countries like Sri Lanka, Pakistan and Bangladesh are expected to make a mark on the globally sourcing supply industry by 2020.