IT exports to grow at 8-10% in FY17: NASSCOM

The Dollar Business Bureau 

Industry body NASSCOM has revised the growth forecast for India’s information technology (IT) industry to 8-10% this year, as its largest members such as Tata Consultancy Services (TCS), Wipro, Infosys and Cognizant are struggling to grow faster due to an uncertain environment. 

This is the second time that the software industry body has estimated a single-digit growth in last 10 years after the industry witnesses its lowest growth of 5% in the fiscal of 2009-10 as a result of the banking meltdown in the United States. 

In April, NASSCOM (National Association of Software and Services Companies) had estimated the $108-billion export-oriented software and back office sector to have a growth rate of 10-12% this year.

“The industry is going through a transient phase with various domestic and global factors impacting its performance. While the effect of various short-term factors may show for a couple more quarters, the worst is behind us,” NASSCOM President R Chandrashekhar, said in a statement. 
 
Indian companies have recorded growth from firms in newer fields such as cloud and digital technologies, adoption of automation, but even this has not been able to balance the sharp decline in volume in conventional IT services.  

At the same time, clients are also calling for massive reduction in prices and expecting from the Indian companies to pass on benefits from output improvement and automation rather than to retain themselves. 

Due to these reasons, Infosys and Cognizant have reduce their yearly revenue forecast two times, whereas Wipro has forecast stagnant growth in the three-month period to December.

NASSCOM said the industry has been affected due to short-term factors and it would revive its growth in the coming few quarters.