Software industry lobby Nasscom expects growth for the sector in the financial year 2020-2021 to be measured, given global headwinds and the impact of the Coronavirus outbreak.
For financial year 2019-2020, Indian information technology (IT) companies are expected to post a muted topline growth of 7.7% in reported terms, garnering revenues of $191 billion, slightly higher than the 7% growth in FY19. The growth was mainly driven by IT services, business process management, engineering services and ecommerce.
In constant currency terms, however, the IT sector’s growth is likely to fall marginally to 8.4% in FY20 from 8.6% in FY19.
On the hiring front, net new hires by the industry stood at 2,05,000, while 8,84,000 employees were given digital skills training. India has over 9,000 startups, which have received an aggregate funding of $4 billion, according to Nasscom.
While the global economy grew by 2.9% in FY20, spending on technology rose by 5.6% at $213 billion, Nasscom said, citing IDC data.
For FY21, 57% of 100-odd CEOs surveyed by the industry body expect growth in the IT services sector to shadow the current financial year. The growth is expected to be led by large digitalisation deals, software implementation by the banking financial services and insurance (BFSI) sector and retail companies, as well as opportunity scouting in European and Asia Pacific countries.
The Nasscom survey found that clients of IT services companies are likely to spend most on augmenting customer experience and deploying technology to improve efficiency and productivity, a statement said.
Among the CEOs surveyed, 53% expect a stronger economy in FY21, 72% expect their clients to do better financially and 60% see clients’ technology spending increase in the same range as it did in FY20.
Taking a long-term view, Nasscom pegs the digitalisation-led global output at nearly $100 trillion, constituting 40% of the global economic growth.
On whether there was a wishlist for US president Donald Trump during his upcoming visit to India, Nasscom chairman Keshav Murugesh said that although he does not expect the visa regime to change overnight, the contribution of Indian IT services companies to the US economy was consistent and that the world’s largest economy would certainly benefit from India's talent and new digital thinking.
The most important recommendation to the US president would be that high-skill digital talent should be treated differently from people applying for immigration for other reasons, Debjani Ghosh, president of Nasscom, said, adding that over 90% H1-B visas issued to Indians are going to US companies in India, who need the talent to fuel innovation.