As global headwinds continue to adversely impact business, IT industry association Nasscom has pegged a lower growth rate for IT-BPM exports for Financial Year 2017-18.
It forecasts exports of $124-125 billion, a growth rate of 7-8 per cent for the year, a notch lower than the 8-10 per cent growth it had pegged for 2016-17. It also expects the industry to see net hiring of 1.3-1.5 lakh during the year.
Nasscom President R Chandrasekhar says increased protectionist rhetoric, Brexit, visa issues, and delayed decision-making due to macro-economic uncertainties will serve as headwinds for the industry.
The association generally gives its annual guidance in February at its flagship leadership conclave in Mumbai, but had deferred this year’s announcement citing global uncertainties owing to geopolitical crises.
Traditional IT services revenues may be taking a hit, but Nasscom sees a ray of hope in the increased contributions from digital verticals as more firms undergo digital transformation.
Announcing the guidance for 2017-18 here on Thursday, Nasscom President R Chandrasekhar and Chairman Raman Roy allayed fears, amplified by media reports, of big job losses due to global roadblocks faced by the industry.
“We could not come out with the guidance numbers in February due to the uncertainties that existed then. We are going to have a growth rate of 7-8 per cent during the year,” Chandrasekhar said.
On reports of poor job scenario in the industry, he said the industry continues to hire in big numbers. “Over 50 per cent of the employees of the top firms have been upskilled to be ready to meet newer job demands. We have identified 55 skillsets with job potential,” he said.
Domestic revenues for the IT-BPM industry would grow at 10-11 per cent to reach $26-26.5 billion, up from $24 billion last year, Chandrasekhar said. Digital projects are contributing 15-20 per cent of revenues for large companies, indicating a significant trend.
Other challenges Currency volatility has led to a difference of 1-3 per cent in growth as measured in constant currency and reported currency terms. “We have seen longer gestation periods for return on investments on spendings by companies on research and development on newer technologies and upgrading skills of the employees,” Chandrasekhar said.
Though the US market is showing strains, it will continue to be a major contributor to the industry. “It won’t change overnight,” Nasscom Vice-Chairman Rishad Premji said.