Nassom cuts India's software growth outlook to 8-10%

IT industry body, Nasscom, has slashed India's software export growth outlook to 8-10 per cent for the current fiscal year ending 2016-17. The move comes as the industry is buffeted by global political and economic uncertainties, slowdown in IT spends by banking/financial services and currency volatility.

According to commentators reduction of the full year growth guidance, from the earlier estimate of 10-12 per cent, reflected the muted outlook givne some industry majors.

"The industry is going through a transient phase with various domestic and global factors impacting its performance," Nasscom president, R Chandrashekhar said.

The IT and BPM export revenue was now  expected at $116-118 billion in 2016-17 as against $119-121 billion projected at the beginning of the year by the software services industry body.

The industry had notched up export revenue of $108 billion in 2015-16. According to Nasscom, the incremental revenue would be between $8-10 billion in 2016-17, as against $10 billion in 2015-16.

The export revenue growth (in constant currency) stood at 12.3 per cent in the previous financial year.

Nasscom said that global uncertainties (Brexit and post-US presidential election dynamics), economic uncertainties (currency volatility and GDP decline in key markets) and slowdown in financial services, energy and telecom were impacting the industry's revenue growth.

This would be the second instance of Nasscom projecting single-digit growth in a decade after the industry saw its lowest growth of 5 per cent in 2009-10 in the aftermath of the banking meltdown in the US.

According to the body's April projections the $108 billion export-focused software and back offices sector was set to grow 10-12 per cent this year.

Though Indian firms had seen growth from clients in new areas such as adoption of automation, cloud and digital technologies, this had failed to offset the drastic dip in volume in traditional IT services.  ]