IT rollercoaster to roll on

Things aren’t as bad for the Indian IT industry as the sombre mood among delegates at the NASSCOM Leadership Forum held recently in Mumbai tended to convey.

Surging forward Indian IT industry is positively looking for innovative ways to get around challenges. Indian IT industry expected to reach $64 billion by the end of the fiscal Exports to account for $40.8 billion and domestic market $23.2 billion Domestic market seen as a key growth driver, driven by government spending IT industry contributes 5.5 per cent of GDP Broader economic issues like a US recession and people challenges could slow the growth of this sector

NASSCOM’s Annual Strategic Review 2008 says the recession fears and HR challenges that so worried the participants at the Leadership Forum are only “impediments”, nothing more, as the industry surges towards revenues of $64 billion (Rs 2,56,000 crore).

On the positive side, the report notes that while revenues from exports continue to dominate, several large firms have also begun focussing on the burgeoning domestic IT services market.

Moreover, many companies are now seeking to increase their presence in Europe so as to derisk their businesses from the impact of a slowdown in the US.

Also, Indian IT companies have begun to explore new markets such as engineering services offshoring, which alone is a $40 billion (Rs 1,60,000 crore) opportunity worldwide, according to some industry estimates.

Som Mittal, President, NASSCOM, isn’t so much worried by the challenges posed by a rising rupee, spiralling people costs and high attrition as he is impressed with the industry’s efforts to get around them. “We see an increasing level of sophistication and specialisation in IT, which are sure signs of it maturing,” he says.

— Rahul Sachitanand