The Indian information technology industry (IT) has dismissed concerns over slowdown in its biggest market, the US, impacting the sector.
Nasscom chairman Lakshmi Narayanan said that the demand environment was strong for the next one year and the customers’ behaviour had shown that there was no need for worry. ?Given all the parameters that we have, there is clearly no sign of a demand slowdown. We do not see any signs (of slowdown or recession) from customer interactions,? he said on the sidelines of Nasscom Quality Summit 2007 here on Thursday.
On Wednesday, the Paris-based think-tank Organisation for Economic Cooperation and Development (OECD) in its interim economic outlook for the 30 richest countries had said that the US economy was likely to face a ?quite significant? slowdown this year because of the fallout in its subprime mortgage market.
Similarly, the UN Conference on Trade and Development in its annual report on Wednesday said that the housing market woes would drag the US GDP growth to a modest 2% in 2007, compared with 3.3% last year. But Narayanan said, ?the customers that we have spoken to are clearly not preparing for one (slowdown)? and added that demand from new geographies like Europe and sectors like financial services and healthcare were seeing growth.
For the FY2006-07, IT exports (including ITeS and BPO) had shown a growth of 33% to record $31.4 billion revenue and for the current fiscal, Nasscom has estimated exports to the tune of $40 billion, a growth of nearly 27%. The US is the major market contributing 66.5% of the total exports, followed by the UK with 15% and the rest of Europe 9%.
Narayanan, however, said that as the supply of software professionals is improving, the software services industry will see wage moderation beginning early next year. On an average, the salaries in the IT industry have been increasing 12-15% y-o-y for the past three years.