The Indian information technology (IT) industry's growth has halved in 2012/13, going by the latest numbers from industry lobby Nasscom. IT-BPO (business process outsourcing) exports and domestic market revenues are expected to total $108 billion this year, inching just 7 per cent over the previous year. In contrast, the industry grew 15 per cent in 2011/12, albeit from a lower base.
IT exports for 2012/13 are likely to come a touch below body Nasscom's previous projections as a difficult economic climate in the United States and Europe resulted in slower spending on technology by global corporations in 2012.
On Tuesday, Nasscom said the industry's IT and BPO exports would rise 10.2 per cent to $76 billion in 2012/13, below an earlier forecast of 11-14 per cent. The numbers are well below the 17 per cent growth the industry recorded in 2011/12.
The industry lobby, however, projected a better year ahead. In 2013/14 exports are likely to recover a bit to post 12-14 per cent growth. This is cold comfort for an industry used to growth rates as high as 30 per cent in the pre-Lehman years.
To be sure, Nasscom's numbers reflect average industry growth rates and some of the market leaders will grow well above these numbers. Cognizant, for instance, expects to grow 17 per cent in calendar year 2013.
Nasscom President Som Mittal and Chairman N. Chandrasekaran insisted that growth of 12-14 per cent is not all that gloomy. "Don't measure the industry on percentile growth. It has a huge base. Look at the incremental dollars it will add," Mittal urged sceptical scribes during a media conference in Mumbai, ahead of the Nasscom's flagship event, the India Leadership Forum.
If IT exports grow 14 per cent in 2013/14, the industry would have added more than $10 billion in incremental revenues as against $7 billion in 2012/13.
N. Chandrasekaran, also the CEO of India's largest IT exporter, TCS, said that based on what he has heard and experienced himself, 2013/14 would turn out to be a very positive year for the industry. "I do believe that as of February 2013, we have better visibility of customer budgets for the next 12 months compared to February 2012," said Chandrasekaran. The macroeconomic climate, he added, would not change overnight. Indian IT, nevertheless, would have opportunities for growth because global corporations are looking to improve their efficiency.