Despite growing concerns about the global economy in many quarters, IT industry body Nasscom has forecast that India’s software exports would grow at about the same rate next fiscal as in the on-going one.
It has projected IT-BPM industry export revenue growth of 10-12% to $119-121 billion for 2016-17. The growth this year is expected to be 12.3% in constant currency and 10.3% in reported currency , with revenue touching $108 bn.
At the beginning of this year, Nasscom had forecast growth of 12-14% in constant currency . The achieved number is towards the lower end of this forecast. “The industry was hit by the global turbulence, particularly in Europe, the problems in the oil sector and the Chinese slowdown that impacted commodity businesses,“ Nasscom president R Chandrashekhar said, but added it was significant that despite these headwinds, the industry grew in double digits, and came with in the projected band.
Constant currency numbers are becoming relevant given the enormous volatility between global currencies that is beyond the control of any company .
The 10-12% band forecast for next year is in line with the 10.3% achieved this year in reported currency (at this stage of forecast, it’s the reported currency that is relevant; differences between reported currency and constant currency will arise if inter-currency values change significantly during the course of the year).
Chandrashekhar said there is continued pressure on companies all over the world to cut costs and increase competitiveness by using technology. “Digital technology is becoming particularly important. The digital business increased three-fold for the IT industry this year. And though the world is becoming more protectionist, the fact is, the western world just does not have enough of the skill sets required. That will help the Indian IT industry,“ he said.