Nasscom lowers 2015-16 export growth forecast

Currency volatility, macroeconomic headwinds and changing technology are likely to pull down growth of Indian information technology and business process management services exports to 12-14 per cent in 2015-16, according to sector body Nasscom.

This is lower than its growth forecast of 13-15 per cent for 2014-15. The export revenue grew 12.3 per cent on a reported currency basis in 2014-15 and 13.1 per cent on a constant currency basis.

The revenues, including hardware and e-commerce, are expected to be $146 billion in 2014-15. Exports have touched $98.5 billion for the period already. But Nasscom said the sector was on track to reach $300-billion revenue by 2020.

Nasscom said global information technology and business process management spending had grown 4.6 per cent and sourcing nine-10 per cent in 2014. The 12 to 14 per cent export growth forecast is similar to last few years’. “We are seeing a continuity. But this year’s numbers are also an aggregation of all the segments, some growing fast,” said R Chandrashekhar, president, Nasscom.

He said $20 billion would be added to revenue in 2015-16.

In 2014-15, the domestic market is expected to be a little over $48 billion, growing 14 per cent from a year ago. This was faster than average industry growth and was driven by e-commerce, which grew 33 per cent year on year to become a $14 billion segment, Nasscom said.

“I think 2015 will be better than 2014,” said R Srikrishna, chief executive of Hexaware. “Discretionary spending in the US will be better in 2015 than last year. Discretionary spending may be low in Europe, but we are hopeful of the non-discretionary part of client budgets to fuel growth in the region,” he added.

The Nasscom Strategic Review 2015 also showed a shift in which segments like engineering, research and development, and digital emerged as outperformers. Engineering, research and product development revenues were $20 billion. Business process management was at $26 billion and digital revenue, which represents social, mobility, analytics and cloud computing, grew from 4 per cent of the industry’s export revenues to 12-14 per cent in 2014-15.

Nasscom said the industry added 230,000 jobs in 2014-15, growing 7 per cent against a revenue growth of 13 per cent. The industry’s employee base crossed 3.5 million and it created indirect employment for over 10 million people.

Revenue per employee grew 1.2 times between 2008-09 and 2013-14. Chandrashekar pointed out employment was not growing in line with revenue and this was expected to continue. He added companies were becoming more efficient and disconnecting the headcount and revenue link.

The number of patents filed has grown 10 times in the last five years. From just 150 in 2008-09, it was more than 1,500 in 2013-14.