The new immigration Bill in the US may not have any adverse effect on India’s IT business, observed the IT trade body Nasscom.
Addressing the media on the sidelines of a seminar, Nasscom Emergeout Surge 2013, held here today, Som Mittal, President, said there is a huge shortage of technical resources in the US. There are some positive aspects in it too.
“If this Bill sails through, the biggest impact will be on our customers there in the US, as Indian companies are working for large US corporations that are going through a transformation. They are batting for us there,” he said.
He also pointed out that it is only at the beginning of a very long process of the Senate Bill. Also, there is a completely new Bill being developed in the House there which containsmany favourable aspects, Mittal explained.
Nasscom hopes that the House Bill will be more moderate and will not have the same amount of discrimination that the Senate Bill has. “Besides, India is also very strategic to the US in a lot of ways. Our IT people go their and sustain the US economy by renting places there and by offering jobs to local people. In the last five years, we have contributed more than $15 billion by taxes and social security there,” he pointed out.
Talking about the IT industry’s growth, he said, driven predominantly by newer geographies, newer verticals and consumers, it is expected to grow at 12-14 per cent in the next few years and would touch $335 billion by 2020. Of this, the IT services industry alone would be to the order of $225 billion by then, said Mittal.
Emerging markets
The IT industry is bullish about its growth prospects. The industry, which is currently growing at 10-12 per cent, would focus more on new emerging markets such as Latin America, Asia-Pacific, China, Japan and Africa. However, he said, “The growth in newer geographies will not be at the cost of our exports to existing markets, but will only be in addition to them.”
For example, he said, countries such as Japan and China account for only 3 per cent of India’s IT services export at present, and “hence there is enormous potential to grow our exports to these markets”.
According to him, the US and Europe alone currently contribute 90 per cent to India’s exports, while the remaining 10 per cent comes from all other geographies. By 2020, new emerging markets will contribute at least 20 per cent of the increased pie, he said.
Similarly, he said contribution from newer industry verticals such as utilities, transport, healthcare, media and entertainment will also go up substantially. As of now, almost 80 per cent of the export revenues of the industry is from verticals such as banking and finance, telecom and manufacturing.
Bigger market segment
Besides, by focusing more on “consumerisation” of technology, the industry can tap a bigger market segment. The ubiquity of connected smart devices has caused an evolution and convergence of four powerful forces – social, mobile, analytics and cloud. These forces have reoriented the business model of traditional IT firms to move towards creative solutions that help clients’ businesses grow, he said.