Hit by currency volatility and unstable political environment in key markets, IT industry body Nasscom lowered the forecast for export growth in 2016-17 to 10-12 per cent, against the 12-14 per cent increase in exports (in constant currency terms) it had forecast last year for 2015-16.

The rupee has weakened about 2 per cent against the dollar this year .

Political instabilities in Europe and West Asia, the upcoming US election and protectionist stances in developed economies are also impacting global tech spending, the industry body said in the Indian IT-BPM industry: FY16 Performance and FY17 Outlook released here on Thursday.

The US accounts for 60 per cent of India’s IT export basket, followed by the UK, which accounts for under 20 per cent.

“Even as there are uncertainties in terms of the global economy, political environment, the pressure and imperative to adopt technology, especially digital technology, continues unabated. It is an important part of the survival of any global company. Therefore the growth remains steady,” Nasscom President R Chandrashekhar said.

The Indian IT-BPM industry is looking at a 12.3 per cent growth in export revenues in FY16 (in constant currency terms) and 10.3 per cent (in reported currency) reaching a total estimated revenue of $108 billion, with the digital solutions business reporting 50 per cent growth, Nasscom said on Thursday.

Domestic revenue too grew 10 per cent, reaching ₹1.41 lakh crore, driven by increased adoption of digital technology by consumers, e-commerce and start-ups. India has also managed to raise market share in global sourcing from 55 per cent to 56 per cent, the report said.

On start-ups “There is tremendous activity in the start-up ecosystem which is a healthy sign,” Nasscom Chairman BVR Mohandas Reddy said.

With over 4,200 start-ups, India is now the third-largest start-up base. Over 1,200 start-ups are being created every year, aided by $4.9 billion worth of funding, over 150 active Venture Capitalists/Private Equities and over 110 incubators and accelerators. “In the next one year, we expect to become the second largest start-up hub,” Reddy added.

The industry employee base has reached a total of 3.7 million with an addition of 2 lakh employees in 2015-16. It expects net employment addition of 2 lakh people in 2016-17.

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