Domestic market expected to grow faster than exports and may touch $26.5 million in FY18
The country’s software export growth is set to slow to 7-8% this fiscal year, down from 8.6% a year earlier, according to industry body Nasscom.
Nasscom expects software export revenue to be between $124-125 billion in the current fiscal year to March 2018. Software exports during the last year ended March 2017 were $116 billion and domestic market revenue, excluding that of hardware, was $24 billion, both in constant currency terms. The domestic market was projected to grow faster than the export market during this fiscal, Nasscom president R.Chandrashekhar said. Revenue from the domestic market may increase 10-11% and touch $26-26.5 billion.
Last fiscal, the industry added $11 billion in revenue, an increase of 8.6% in constant currency and 7.6% in reported currency, despite headwinds in the form of “increased rhetoric on protectionism, elections, Brexit and visa issues.
Macroeconomic uncertainties also led to delay in the decision-making process of customers, while in traditional services the growth was slower on account of the focus on cost optimisation. Currency volatility led to a difference of 1-3% between constant currency and reported currency growth, the National Association of Software & Services Companies (Nasscom) said.
Stating that it was the first instance of Nasscom making the guidance announcement in Hyderabad, Chairman Raman Roy said it is a precursor to the focus that will remain on the city over 8-12 months ahead. Hyderabad will play host to several programmes of Nasscom as well as the prestigious World Congress on IT, which is coming to India for the first time.
The outlook, Nasscom chairman Raman Roy said, comes in the backdrop of the industry being at an interesting “inflection point.”
Mr. Chandrashekhar said improvements in financial services and a high potential in digital businesses would be the key growth drivers. Nasscom had deferred making the announcement in February. Then it had lowered the projections for the last fiscal year.
“The direction today is far clear… have a greater visibility and reasonably confident of what we are talking about,” he said.
An improvement in legacy business and increased automation-based projects would be among the growth drivers, Mr. Chandrashekhar said. The industry also foresaw itself as a net hirer. The number of people to be hired this year would be between 1.3 lakh and 1.5 lakh, he said. The demand will be for technology-skilled professionals and it was imperative for new and existing people to reskill themselves.
Vice-chairman Rishad Premji said a big opportunity for reskilling was emerging and unlike in the past many in the workforce were coming forward to equip themselves with new skills.