Open new fronts, Nasscom tells IT firms

Nasscom has said the US market is looking up but asked the industry to open up new fronts such as China, Japan, South Korea and Africa in order not to keep all eggs in one basket.

It admitted that the domestic story has not been good in the country with stagnant growth in the last two years.

Sticking to the industry growth forecast at 13-15 per cent for 2014-15, Nasscom President R Chandrashekar has said that it is to important prepare country-specific strategies to tap the Asian and African markets. As part of this strategy, the apex industry association has just completed a study with KPMG on the opportunities in China for Indian IT companies.

He was addressing a meeting of ITsAP (IT Industry Association of Andhra Pradesh) on opportunities for small and medium enterprises here on Wednesday.

As the financial year comes to a close, the Nasscom argued that there was no reason why it should change projections for the current year and the next fiscal. It said the exports would close at $86 billion for 2013-14, pegging the export forecast for next year at $97-99 billion, growing at 13-15 per cent.

With a stagnant $32-billion domestic market contribution, the size of the IT-BPO industry would grow to $118 billion in 2013-14 from $108 billion in 2013.

“There is a slowdown in the domestic market. There is growth of 10 per cent in rupee terms, though the growth has been flat in dollar terms. It has not been a good story. We need to do a lot and Nasscom is focusing on some of the areas that needed immediate attention,” he said.

Chandrashekar, the former Telecom Secretary, said that political uncertainty, slowdown in policy and decision making and macro economic issues were the major challenges that the IT-BPO industry was facing.

The growth in the size of the industry, however, is not reflecting in growth in employment generation.

“It is only half of the industry growth rate. This is largely because the transformation happening in the industry that calls for new skill sets. Some jobs would go at the bottom, but surely some are added at the higher end,” he said.

“There is a deficit of skills in India and abroad for niche areas,” he said, refuting the argument that the IT companies had reduced or stopped hiring from the campuses.