India’s IT sector is expected to record steady growth in IT exports in 2018-19, clocking around $135 - $137 billion at a growth of 7-9 per cent from the $126 billion it is expected to clock during the current financial year. While growth is expected to remain in the single digit range, the National Association of Software and Services Companies (Nasscom) stated that green shoots are becoming visible.
“The year 2017-18 began on a muted note, but driven by a better growth in the second-half of the year is expected to clock revenues of $167 billion, representing a growth of 7.8 per cent for export revenues and 10 per cent in domestic revenues,” said Nasscom president R Chandrasekhar (in pic), adding that the current outlook is of “cautious optimism”.
Much of the expectations are being driven by the clear increase in orders, with chairman Raman Roy pointing out that this would flow into the numbers.
Other factors giving hope include the broader upswing in the global economy. “The mood is upbeat, the trends positive. There’s broader upswing in global economy, the US economy and the revival in Europe is translating into business opportunities but with a little bit of lag. We will see this kicking in later part of the year,” Chandrasekhar said. The next financial year might even end up with higher than projected growth, he added.
The rapid growth of the digital side of the business is also a sign of revenues recovering, Nasscom pointed out, with global spending in the digital space growing at 20 per cent per annum. Indian IT’s digital revenues is expected to close financial year 2017-18 at around 30 per cent and this segment is expected to grow at 1.5 to 2 times the rest of the industry.
But, many of the headwinds still remain, like changes in global immigration policy. “Headwinds are still there and some of the uncertainties remain but the overall industry continues to grow demonstrating its ability to overcome challenges.”
Growth in the B2B startup sector also throws up a unique opportunity for India, according to Roy, who stated that from small digital pilots, to proof of concepts with product firms, the sector was witnessing an industrialisation of the digital.