13.2.13

Nasscom on Software Exports FY14


Software export growth is expected to improve marginally next year, Nasscom said on the eve of an annual gathering which is taking place amid testing times for the industry.
At 12-14%, the growth projection by the National Association of Software and Services Companies was largely along expected lines. The industry body also bumped lower, to 10.2%, its export growth expectation for the financial year which ends in March. It had forecast at least 11% growth before projecting a range of 11-14%.
Other than the forecast which threw up no surprises, the grouping headed by its president Som Mittal is expected to face questions about its role as the self-described ‘voice’ of the industry. Critics say that Nasscom is behind the times in projecting and protecting the interests of the industry and that smaller software product companies are getting the short shrift.
The uncertain mood in the industry is a reflection of a more difficult demand environment as well as fundamental shifts in technology and business models.
At 10.2% (translating to $75.8 billion worth of revenue), export growth will be sharply lower than the 17% and 18% rates in the previous two years.
In 2013-14, India is expected to export software and IT services worth $84 billion-$87 billion ( Rs.4.5-4.7 lakh crore), or nearly $10 billion in additional revenue.
Mittal, whose term as Nasscom president was extended until early 2014, also pointed to the large base of the Indian software industry to make the case that incremental revenue growth is the key.
As large corporations grapple with data analytics, mobility and cloud computing, the nature of demand in global technology outsourcing market is changing, forcing Indian information technology services companies to solve clients’ business challenges rather than merely sell technology solutions to them.
Also, India’s top software services firms reported wide deviations in growth during the current financial year. While TCS is expected to close the financial year with about 14% growth, others such as Bangalore-based Infosys and Wipro are estimated to grow at about 5% during the same period. New Jersey-based Cognizant, one of the fastest growing outsourcers, has said it expects to grow by at least 17% in 2013, compared with the 20% last year. Technology researcher Gartner was of the opinion that Nasscom’s estimates could be a tad conservative, given the demand outlook.
India’s software and BPO contributes 8% to economic output and employs three million professionals, making it the largest organised private sector employer in the country. The number of jobs added is expected to grow by 7% during the year to March.

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