Bangalore: India’s software and services exports are seen rising 4 to 7% in the year to March 2010, sharply slowing from past years’ robust growth on sluggish demand for outsourcing services, an industry body said on Wednesday.
Export of software and back-office outsourcing services will rise to $48 billion to $50 billion in this fiscal year, up from $46.3 billion last year, the National Association of Software and Service Companies (Nasscom) said.
A Nasscom spokeswoman said the growth in percent terms was calculated before rounding off the target of $48-$50 billion.
The sector’s export earnings grew 16% in the fiscal year ending March 2009, having grown by more than 20% in previous years.
Nasscom said in a statement the demand environment remained weak and global information technology spending was expected to fall further this year and next, with Indian companies facing pricing pressure.
India’s export-driven outsourcing companies have thrived for years by winning contracts from overseas clients, helped by a large pool of English-speaking engineering workforce and cheaper wages.
But a downturn in the United States, which accounts for more than half of the sector’s export revenue, and turmoil in the global financial sector have halted the scorching pace of growth.
Infosys Technologies, India’s No. 2 software services exporter, has forecast its first annual revenue fall for the year to March 2010 as some of its overseas clients cutback on outsourcing and demand fee cuts in a tough business environment.
Sector leader Tata Consultancy Services, Infosys and third-ranked Wipro offer services such as system integration, application development, supply chain design and back-office services.
The firms face stiff competition from bigger global rivals such as IBM and Accenture in winning large outsourcing deals.
Nasscom said total revenue of the export-driven sector, which employs more than 2 million people, grew by 13% to $58.8 billion in the year to March 2009.