The revenue of domestic technology industry, including hardware, is expected to increase to $253.9 billion this fiscal. That represents a growth of 3.8%, compared with the previous year’s 8.4%, according to industry body Nasscom’s Strategic Review 2024 report.
India’s technology services exports are estimated to touch $199 billion in the fiscal year ending March 2024, a growth of 3.3% compared to FY23. The IT services revenue in the same period is estimated at $128.4 billion.
The report said that the tech sector will add 60,000 new jobs in FY24, compared to 270,000 jobs in FY23. Between 2023 and 2024, over 650,000 employees are being trained in generative AI skills.
Commenting about falling headcounts in tech industry, Rajesh Nambiar, chairperson, Nasscom said the glut after pandemic, efficiency gains due to AI and the slow discretionary spends have all contributed to falling headcount.
Nasscom said, “With around 50% slide in tech spending and 6% decline in tech contracts in 2023 globally, the technology industry in India, similar to global markets is currently navigating a tough terrain. Growing at 3.8%, the industry added $9.3 billion incremental revenue, taking the total industry revenue to over $253.9 Billion (including hardware), in FY24E (estimated).”
The report said the sub-sectors such as GCC (global capability centres) and ER&D (Engineering, Research and Development) have emerged as growth hotspots, with the latter alone contributing 48% to the total export revenue addition in FY24.
The industry saw an addition of 53 new GCCs in 2023. With an increase in clients’ technology spending, the overall deal count in 2023 marginally surpassed that of 2022, with 70% increase in the signing of larger deals ($100 million plus).
Nambiar, added, “While headwinds like global economic slowdown, inflation, recessionary fears and geopolitical conflicts continue to pose challenges, we are confident that the industry will bounce back. With digital tech spending expected to grow in 2024, we will also witness emergence of alternative demand source, customer retention and faster go-to-market strategies in newer markets for enterprises.”
Debjani Ghosh, president, Nasscom, said, “We see FY25 as the year of capability building as the new normal. Navigating the current challenges will require the industry to focus on 4Rs – Reshape – Accelerate transition to AI-first companies; Reskill – Make talent the biggest competitive advantage; Rewire growth and Raise IP creation and R&D investments.”