US downgrade won't impact IT sector: NASSCOM

IT apex body NASSCOM has projected a 16-18 growth outlook for the Indian IT sector in FY12, allaying fears of a prolonged resurgence of the global recession or a double-dip recession in the US economy. NASSCOM said while it had factored in global uncertainties, the industry needs to carefully monitor the developments in the global environment.

Acknowledging the projections by economists on the possibility of a double-dip recession in the US, NASSCOM said in a statement: "It is important to highlight that this downgrade is driven by Federal deficit of the US and not due to the performance of the economy/industry."

According to NASSCOM, in the near-term future, this recent development in the global economic environment is not likely to impact the Indian IT industry.

"While the US economy has demonstrated sluggish growth, US businesses have performed well and have strong balance sheets. US businesses continue to invest for the future which is also driving the growth of Indian IT sector," it said.

The Indian IT industry, while closely intertwined with the global economy, has also a growing domestic market that would help it sustain growth, NASSCOM said.

"The US is and will continue to be one of the largest markets for us, and we see the Indian IT industry partnering our US customers to build in greater efficiencies, which are a prerequisite in a low growth economy," it said.

NASSCOM said it would continue to monitor the developments in US and expressed a bounce-back in the US economy.