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Bangalore: Recovering
from global tech meltdown, the resilient Indian IT industry
returned to high growth during a tumultuous 2010 but is cautiously
optimistic about 2011 in view of the economic uncertainty in
Europe and the US, which account for 80-85 percent of its export
revenue from software services and back office operations.
"Though 2010 has been a good year for our IT industry with a
healthy growth, we are entering the new year with cautious
optimism as clouds of uncertainty hang over Europe and to an
extent the US due to less than expected recovery from the Great
Recession," Infosys Technologies Chief Executive S. Gopalakrishnan
told IANS.
Putting behind fiscal 2009-10 as a year of downturn, when the
annual growth plunged to six percent after a scorching cumulative
growth of 25-30 percent during the previous four years, the
industry returned to double-digit growth in this fiscal (2010-11),
thanks to renewed investments by global firms across verticals in
IT infrastructure, software and back office services.
"We have seen growth returning and business coming back because of
transformational needs of our global customers and changing
business models favouring more outsourcing and off-shoring of IT
services and solutions we deliver cost-effectively," industry body
Nasscom president Som Mittal said.
With the worst behind and the industry on the recovery path,
Nasscom has projected $56-57 billion or 13-15 percent year-on-year
(YoY) growth from exports and Rs.768 billion (Rs.76,800 crore) or
15-17 percent YoY growth in domestic market this fiscal (2010-11).
"With growth surpassing our expectations during the first half, we
will be revising the outlook for this fiscal after the third
quarter (Oct-Dec) results, factoring the anticipated growth in the
fourth quarter (Jan-March)," Mittal told IANS.
Emerging largely unscathed from the global tech meltdown, the
Indian IT-BPO (business process outsourcing) industry grew 6
percent last fiscal (2009-10) to touch $50 billion (Rs.23,100
crore) in exports and 12 percent YoY in the domestic market to
post Rs.66,200 crore ($13.25 billion).
"Sustaining this year's robust growth in 2011 depends on how fast
economies in Europe recover, as there are concerns over some
countries still grappling with financial crisis. Sovereign fallout
in any country will have a domino effect on the global economy,"
Gopalakrishnan pointed out.
The year, however, began on a sluggish note with the industry
reeling under the ripple effect of slowdown in 2009-10,
conspicuous absence of fresh investments and hiring and thousands
of techies laid off or fearing pink slips.
"The year demonstrated the inherent strength of the industry to
get over the global recovery trend. As we exit 2010, the new year
looks promising, as the industry is poised to get back to growth
trajectory despite an element of uncertainty looming over Europe
due to monetary and regulatory crisis," Wipro Executive Vice
President and Chief Financial Officer Suresh Senapaty said.
If the global financial crisis and tech meltdown made the Indian
IT industry cringe and resort to unconventional measures to stay
afloat, the revival made them go overboard in exploring new
markets, scouting for talent and investing in new service lines to
offer end-to-end solutions across verticals.
"Unlike the crisis we faced during the dotcom bust earlier in the
decade, the global recession tested our resilience and gave us an
opportunity to provide more for less, as IT budgets shrunk and
clients were in consolidation process," Genpact Chief Executive
and past Nasscom chairman Pramod Bhasin said.
To sustain the growth momentum and make optimal use of their
resources, even export-oriented bellwethers like TCS, Infosys,
Wipro and HCL turned aggressive in the domestic market as
enterprises, state-run organisations and governments across the
country have decided to enhance their investments in IT
infrastructure, products and services for the benefit of its
people.
Buoyed by increased tech spending in the private and public
sectors, the industry has been gearing up to offer its services in
new areas such as engineering services and product development.
With 450 delivery centres in 60 countries worldwide, the Indian IT
industry has an unparalleled global value chain. The industry
resumed enhancing its global workforce, hiring specialised talent
in developed markets and building a truly global delivery model.
Mergers and acquisitions in the IT industry remained sluggish as
companies were in consolidation mode and continued to be
risk-averse.
For raising human capital, besides the bellwethers jointly
offering about 100,000 jobs this fiscal to create bench strength
and build capacity in anticipation of better growth in next fiscal
(2011-12), small and medium business too have resumed hiring to
meet the demand for ICT services and products.
As a top outsourcing destination and back office operations hub,
India dominates the global IT services market with 51 percent
share.
(Fakir Balaji
can be contacted at fakir.b@ians.in)
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