Economic environment ideal for domestic IT surge: HYSEA President

Jayarama Emani | The Dollar Business “The government has always been a major consumer of IT software and services in India. That will definitely continue to grow in the domestic segment, as we take on more digitalization of government functions and citizen services,” said Ramesh Loganathan, President, Hyderabad Software Exporters Association. Speaking exclusively to The Dollar Business, Ramesh said that with the government focusing more on ‘Make in India’ concept, the economy and specific sectors like infrastructure, healthcare as well as agriculture are likely to witness growth rates like never before. With some headwinds like foreign exchange fluctuations and uncertainty over oil prices likely to emerge in 2015-16, India is all poised to full take advantage of the IT start-up landscape with it being the fourth largest start-up hub in the world with 3,100 start-ups. Any further push on digitization can only mean more opportunities for the domestic industry, he opined. Reacting to a recently released NASSCOM report in which the apex IT body said that India must re-designate itself as a solutions provider rather than a service provider, Ramesh said, “Indian companies as solution providers are relatively small. Solution providers can be either as packaged software (Independent Software vendors; the product companies) or turnkey projects where complete solutions are delivered. In latter we are OK, but in former we are just beginning to scratch the surface.” “Start-ups are slowly maturing into mainstream. On custom solutions, today by and large the turnkey projects are execution focused; wherein the project is well defined and designed, we just take on the technical design and implementation. Next wave here could be complete solutions that are consulting led where we even help define the solution itself. And then design and implement,” added. Meanwhile, the Nasscom Strategic review 2015 has said that the Information Technology (IT) business process management (BPM) sector has been fuelled by the customer’s priority to go digital, and IT exports are likely to end this fiscal with 12.3 per cent growth in reported currency terms to $98.5 billion. This is against an earlier estimate of 13-15 per cent. The report also said that the total revenues for the industry, including domestic revenues and e-commerce, are expected to be $146 billion in 2014-15. IT services grew 12.6 per cent, BPM 11 per cent and engineering R&D as well as product development 13.2 per cent. The domestic market grew 14 per cent, fuelled by e-commerce revenues of $14 billion to reach $48 billion. The industry now employs 35 lakh professionals and added 2.30 lakh employees in 2014-15, the report added. In 2015-16, Nasscom expects the industry to add revenues of $20 billion to the existing revenues of $146 billion with export revenues projected to grow 12-14 per cent and reach $110-112 billion. Over the same period, domestic revenues (including e-commerce) can grow 15-17 per cent and reach $55-57 billion.  

This article was published on February 12, 2015.