Hit by global political and economic uncertainties, the Indian IT industry's software exports are projected to grow at 7-8 percent only during this fiscal (2017-18) -- lower than the 8-10 percent during the 2016-17 fiscal, Nasscom said on Thursday.
"The outlook for the IT industry in fiscal 2017-18 is 7-8 per cent growth in exports and 10-11 percent in the domestic market as against 10-12 per cent in 2016-17," the National Association of Software and Services Companies (Nasscom) said.
The exports are likely to be worth $124-125 billion -- up from $116 billion (in constant currency) during the previous fiscal. The revenues from the domestic market are expected to be $26-26.5 billion against $24 billion in 2016-17.
The lower export outlook comes in the light of political and economic uncertainties that impacted decision-making and discretionary spend during the last fiscal (2016-17).
The $150-billion Indian IT industry includes revenues from Business Process Management (BPM), software services and software products. Their exports contribute about 80 percent to the revenue.
Noting that digital solutions and niche segments would be the key growth drivers, the industry's representative body said the revenue projection was based on improvements in financial services and high potential in digital business.
Allaying fears of slowdown and job losses, Nasscom Chairman Raman Roy told reporters here that the industry was expected to add 1.3-1.5 lakh jobs during the fiscal as it continued to be a net hirer with the demand for skilled professionals growing across its segments.
The industry association, however, admitted that it was imperative for new and existing talent to reskill to prepare for emerging job roles which required new skill sets.
One of the takeaways from the analysis of the industry performance in the last fiscal was the fast adoption of digital solutions by the Indian enterprise.
"The industry has grabbed the bull by its horns and is well on its journey of transformation to capture new opportunities in digital segment," said Nasscom President R. Chandrasekhar at the news conference.
Chandrasekhar pointed out that global outlook for the IT industry is optimistic with analysts projecting strong upsurge in opportunity in 2017 and 2018.
"India's share in this global opportunity is not only holding steady but increasing. The attractiveness of India as the investment destination continues to be on rise," he added.
He said the domestic market was the fastest growing tech market in the Asia Pacific region. It grew over 11 per cent in 2016-17.
The industry body is also looking at newer markets moving beyond heavy dependence on the US and UK, which together account for 80 percent of the exports. It is working to expand opportunities in newer markets like Continental Europe, Japan, China and Africa.
"These are huge markets. For example Japan is the second biggest IT market in the world but our penetration is low," said Chandrasekhar.
Nasscom has taken up a programme for outreach to newer geographies. It, along with the government, is working to develop market opportunities in Japan and China. Similarly, business delegations are being sent to Africa and the Middle East.
The US accounts for 61-62 percent of India's total IT exports. Nasscom Vice Chairman Rishad Premji said that while the numbers would not change overnight, the percentage would come down in the long run with the Indian industry diversifying into other markets.
Chandrasekhar said there was a churn within the industry as some jobs were disappearing but new jobs with new skill sets were being created.
Nasscom is also working to establish a comprehensive digital skilling platform to reskill a 1.5 to 2 million workforce in the next four-to-five years.
The industry body is working with its members and partners to develop the platform, which is likely to take shape in next few months.