In a first in 25 years, Nasscom, a leading trade association of Indian information technology and business process outsourcing industry, has refrained from issuing a growth forecast for the sector for the next financial year. Presence of huge uncertainties in the market, fueled by macroeconomic factors, currency fluctuation and political volatility is cited as the reason for this. The unprecedented move, which came amid rising concern over the possible impacts of new H-1B visa rules proposed by the US, the biggest market for Indian IT sector, has dampened the mood of the sector further.
But it is not all gloom and doom for the Indian IT industry. Nasscom points out that India’s share in global sourcing has risen to 56 percent in 2016 from 52 percent in 2012. We are still the biggest destination for business process management and our business from financial services, accounting 60 percent of our total outsourcing business, is showing a healthy growth. Also, the sector’s revenue growth in the last three months to December 2016 is not that bad despite currency fluctuations and global uncertainties. It is also worth noting that analysts, despite admitting some short-term challenges, are largely positive on global IT spending in 2018.
Above all, I think the Indian IT sector has enough strength to withstand any headwind. In the past, it showed resilience and confidence in many such difficult times, and I strongly believe this time would be no different. In fact, some business leaders have already termed the current development as a blessing in disguise, pointing to the huge size of the domestic IT market and ample opportunities available in different industries and geographies that are yet to be explored. But at the same time we expect the government to strongly raise the issue before the US administration and if required it may consider dragging the latter to the WTO.
According to media reports, an Indian delegation of IT sector leaders would meet US lawmakers later this month to highlight the contribution of the Indian IT companies to the US economy. Data shows that the number of Indian IT specialists working on temporary visas was only 0.009 percent of total US workforce of 158 billion in FY 2015. In contrast, the sector is playing in a big way in terms of job creation, directly supporting over 4 lakh jobs. The role is no less important when it comes to investment, tax payment and philanthropic activities, considering which the proposed restrictions sound quite illogical.