IT exports to grow 4-7% in FY10: Nasscom

IT exports to grow 4-7% in FY10: Nasscom
The Economic Times, July 30, 2009, Page 12

Our Bureau CHENNAI

THE IT industry, despite being optimistic on recovery by mid-2010, has projected a single-digit growth of 4-7% for its software and services export during 2009-10. Its projections for the domestic IT and BPO sector growth were pegged higher at 15-18% for the same time period. Nasscom released the annual report at its HR summit held in Chennai on Wednesday.

IT software exports stood at $46.3 billion for FY09, a 14% growth from $40.4 billion in FY08. Domestic services and BPO revenues amounted to Rs 57,000 crore, a 21% growth from Rs 47,000 crore in FY08. Nasscom had projected a growth of 22% in mid-2008 and subsequently scaled it down to 16%.

“We predicted double-digit growth, albeit scaled down, in the middle of the slowdown, because we were still delivering for contracts made in previous years,” said Nasscom chairman Pramod Bhasin. “But, now we are projecting slower growth, thanks to the dwindling contracts during the slowdown last year.”

He also said that MNCs and large companies had contributed significantly to the figures. Case in point is that adjusting for Satyam’s revenues, export growth in 2009 comes to 16.3%. Cross currency impact accounted for a further 2.4% suppression in growth.

Among exports, services accounted for 57% of revenues, BPO for 27.5% and products & engineering software for 15.5%. In the domestic sector, the split between the three segments was 66.6%, 15.6% and 17.7%, respectively.

“Industry outlook is definitely on the domestic segment and unexplored markets like South America, West Asia, and blocks of Europe,” said Nasscom president Som Mittal. In the domestic segment, BPO grew by 40%, services by 20% and overall outsourcing deals by 32%. “So, recovery will be driven by the BPO sector mainly,” Mr Bhasin said.